- Volkswagen and Stellantis saw significant EV sales growth in Europe, with Volkswagen’s EV sales more than doubling in Q1 2025.
- Despite growth, both companies face profitability pressures, with Volkswagen’s margin slipping and Stellantis dealing with rising costs.
- Europe is leading the shift to electric mobility, but faster growth is needed to meet 2035 net-zero goals.
Volkswagen and Stellantis are hitting peak EV sales, but is Europe moving fast enough?
Volkswagen Group is ramping up its electric vehicle (EV) efforts as demand surges across Europe. In the first quarter of 2025, one in five vehicles it sold in Western Europe was fully electric, with EV sales more than doubling year-on-year. Orders for electric models rose 64%, and fully electric vehicles now make up over 20% of the company’s regional backlog.
New models like the VW ID.7 Tourer, Audi Q6 e-tron, and Porsche 911 are helping to drive this momentum. Overall, Volkswagen sold 2.1 million vehicles in Q1 2025, up slightly from last year, with especially strong performance in Europe and South America.
This growth reflects a wider European trend
In 2024, battery electric vehicle (BEV) sales in the EU surpassed diesel for the first time, claiming 13.6% of the market. The shift is backed by strong policy support. The European Union has committed to phasing out new combustion-engine car sales by 2035. Automakers are responding—fast.
Stellantis, the parent company of Peugeot, Opel, and Fiat, has also regained momentum. In Q1 2025, it ranked second in BEV market share in the EU30 region, holding 13%. It also led the hybrid segment with a 15.5% share. Stellantis is ramping up production of electrified versions of the Citroën ë-C3, Opel Grandland, and others, while investing in AI-powered smart car tech through partnerships like its expanded collaboration with Mistral AI.
Despite the progress, challenges remain
Volkswagen’s Q1 operating profit dropped to €2.9 billion, with its margin falling to 3.7%. Stellantis and others are facing similar cost pressures. Both companies are working to scale EV production while maintaining profitability.
Looking at the bigger picture, Europe is among the global leaders in EV adoption. By 2027, EVs are expected to make up 41% of new passenger vehicle sales in Europe, far ahead of the global average of 33%. However, the rate of growth is slowing. From 2020 to 2023, global EV sales grew by 61% per year. That figure is expected to drop to 21% annually through 2027.
To meet net-zero targets, the pace must increase. The Net Zero Scenario calls for 679 million EVs on the road globally by 2035—far beyond today’s trajectory. Europe is making strong strides, but the road ahead requires even faster, broader adoption.
