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The French new-car market is experiencing a continued decline in overall registrations, with a year-to-date drop of around -8% to -12% depending on the month and source. This contraction is accompanied by significant shifts in powertrain registrations and market dynamics shaped by regulatory and policy changes.

Powertrain Registration Trends in France 2025

Petrol registrations have declined sharply, with one source citing a 21.2% drop in petrol car registrations by mid-2025, the steepest in Europe. Diesel and petrol remain common in affordable models like Dacia, but both are losing market share as regulations tighten and consumer preferences shift.

Hybrid registrations are increasing as reduced eco-bonuses for full Battery-electric vehicles (BEVs) and stricter CO₂ taxes make hybrids more attractive, especially compact hybrid models like the Renault Clio and Peugeot 3008 which dominate sales.

Battery-electric vehicle (BEV) registrations continue to grow but face challenges. France ranked 2nd in European BEV market share with about 13% in H1 2025, despite a modest contraction (-5.7%) in units sold, reflecting tightening incentives and new taxes.

Impact of New Plans and Stricter CAFE Standards

The French government’s reduction of BEV incentives (eco-bonuses) and implementation of a stricter malus tax on carbon emissions from February 2025 have affected BEV purchase decisions, slowing growth compared to previous years. CAFE (Corporate Average Fuel Economy) standards have been tightened in Europe, pushing automakers to rapidly increase their electric vehicle portfolios to meet mandatory fleet emission targets, which supports ongoing BEV market acceleration overall, despite short-term regulatory impacts in France.

These regulatory pressures are driving both a shift toward hybrid powertrains as a bridge technology and a gradual push for electrification in the long term.

Market Context and Forecast

France’s new car registrations show a sustained decline (-7.8% market share loss in Europe) partly due to political and fiscal uncertainties affecting consumer confidence. Hybrid vehicles currently dominate due to a combination of affordability, policy incentives, and tighter restrictions on petrol/diesel vehicles.

The BEV segment is forecasted to grow globally and across Europe but faces a mixed outlook in France in 2025 due to incentive recalibration and recent tax changes, which moderate momentum despite ongoing CAFE-driven manufacturer commitments.

Overall, the French market is in a state of transition with sales decline in combustion engines, hybrid growth as an intermediate solution, and cautious but steady growth in BEVs constrained by policy changes.

Key Findings

• Petrol and diesel registrations are declining steeply.
• Hybrid registrations are rising, supported by policy shifts and consumer acceptance.
• Battery-electric vehicles see continued but moderated growth due to reduced incentives and stricter CO₂ taxes.
• Tighter CAFE standards drive automaker strategies toward electrification, ensuring BEV growth in the medium term despite short-term regulatory headwinds.

In January 2025, a total of 114,673 units were sent to customers, which is 7,609 units less than the same month in 2024. Registrations of Tesla models declined significantly, by 63%, in January 2025. Renault saw registrations of BEVs almost double in January 2025, thanks to the success of the Renault 5. MHEV registrations were up 91% year on year to 24,347 units in January 2025. The BEV market share was eroded in January 2025, with technology taking 17.4% of total registrations, a drop of 1pp. MHEV's market share jumped by 10.8 percentage points (pp) in January 2025, reaching 21.2% of all registrations. PHEVs saw a decline of 54% in January 2025, with just 4,852 registrations. The new Renault 5 led the BEV market with 2,813 registrations in the month.

Marie-Laure Nivot, head of automotive market analysis at AAA Data, commented that the level of orders is concerning and suggests a persistent weakness in registrations for the months to come. The Corporate Average Fuel Economy (CAFÉ) standard in Europe has seen emissions targets for carmakers tightened this year.

Sources:

1. AAA Data
2. PFA
3. European Automobile Manufacturers' Association (ACEA)
4. French Ministry of Ecological Transition
5. European Environment Agency (EEA)
6. In the forecast of the French automotive market in 2025, hybrid vehicles are predicted to continue their upward trend due to affordability, policy incentives, and stricter regulations on petrol and diesel vehicles.
7. The French government's decision to reduce eco-bonuses for battery-electric vehicles and implement stricter CO₂ taxes have affected the growth rate of BEVs, leading to a moderated increase in BEV registrations compared to previous years.

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