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In the world of automotive industry, May 2025 marked a significant milestone with a 2.5% month-over-month growth in the European new car market [1]. This expansion, fuelled by a surge in electric and plug-in hybrid vehicle sales, brings the year-to-date growth to a more modest 0.7%.
Among the European nations, the UK and Spain have particularly captured the attention of industry experts due to their impressive electric vehicle (EV) growth. The UK, with a market share of 14.1% in the European car market [2], has witnessed a notable surge in EV sales, with Tesla leading the charge. In June 2025, Tesla registrations jumped by an astounding 224% month-over-month, making it the top-selling electric car brand in the UK for the month [3].
Spain, too, has experienced a similar boom, with electric vehicle registrations (specifically Tesla's) more than tripling in June 2025 compared to May [3]. New car registrations in Spain saw a significant increase of 66.6% in May 2025, driven by key market factors including regulatory updates and incentives [4].
While both countries have seen robust growth in electric vehicle sales, the UK experienced a more dramatic month-over-month increase in June, especially with Tesla's performance. Spain's overall new car market growth has been impressive, with a strong increase in registrations, which may be influenced by recent regulatory updates and EV incentives.
The UK's EV market growth is further highlighted by the introduction of an annual vehicle excise duty (VED) of £195 for battery-electric vehicles (BEVs), with a £10 charge in the first year of registration [5]. In contrast, Spain has renewed its MOVES III program, offering incentives up to €7,000 for EV purchases, including scrapping an old car [6].
As we await May's figures for a clearer picture of the impact of these changes, it's evident that the UK and Spain's EV incentives and registration figures could significantly impact each country's registrations, especially their EV markets.
On a broader scale, the European Parliament has voted through the bloc's CO emission standards for new cars and vans, allowing for averaging the fleet CO emission target of 93.6g/km across 2025, 2026, and 2027 [7]. The EU is also initiating a World Trade Organisation dispute against the US over tariffs on cars and car parts [8].
In the midst of these changes, Ford has announced a $1.5 billion (€1.34 billion) hit to its EBIT due to the current tariff situation [9], while Toyota factored in a 180 billion yen (€1.1 billion) impact on operating income from tariffs in April and May [10].
As the automotive landscape continues to evolve, the UK and Spain's new-car markets and EV markets will undoubtedly remain in the spotlight, offering a fascinating study in the impact of regulatory updates, incentives, and tariffs on the industry's growth.
Sources: [1] Autovista24, May 2025. [2] Society of Motor Manufacturers and Traders, 2025. [3] The Guardian, June 2025. [4] El País, May 2025. [5] gov.uk, 2025. [6] El País, June 2025. [7] European Parliament, 2025. [8] European Commission, 2025. [9] Reuters, June 2025. [10] Reuters, May 2025.
- The surge in electric and plug-in hybrid vehicle sales in the European Union, particularly in the UK and Spain, has sparked interest in environmental-science, as these nations strive to reduce their carbon footprint in the industry.
- The financial implications of the UK's and Spain's EV incentives and regulatory updates, such as vehicle excise duty and scrapping incentives, may significantly impact the overall finance of the automotive sector in these countries.
- As the European Union pushes for stricter emissions standards in the automotive industry, the transportation sector must navigate through challenges posed by tariffs, as evident by announcements from Ford and Toyota, and adhere to these standards to preserve the environment and spur growth in the industry.
