The historical importance of diesel engines in Europe cannot be overstated. At its peak in the 2010s, diesel accounted for more than 50 percent of new car sales. Of course, this was right after the Volkswagen Group’s messy scandal, which, possibly, marked the beginning of the end. Sales never recovered, and it’s been downhill ever since. According to data published by the European Automobile Manufacturers Association, in 2017, gasoline cars outsold diesels for the first time since 2009.
Fast forward to 2021, when self-charging hybrids outsold diesels in Europe for the first time. A year later, purely electric cars were in higher demand than diesel-powered vehicles, marking a first on the continent. In 2025, the decline of the diesel engine continues as it is kicked off the podium, slipping to fourth position.
Plug-in hybrids held a 9.4 percent market share in the first ten months of the year. During October, diesels accounted for just 8 percent of total new car sales in the 27 EU countries plus Iceland, Liechtenstein, Norway, Switzerland (EFTA), and the United Kingdom.
As you can imagine, the switch in positions between diesel and plug-in hybrid didn’t happen overnight. By the end of Q2 2025, PHEVs were already ahead of diesels in terms of popularity among new car buyers. The gap is likely to widen in the final two months of the year, and it’s hard to imagine the diesels ever reclaiming a podium spot.
Photo by: BMW
How did this happen? A number of factors have contributed to the diesel engine’s spectacular drop. Stricter emissions regulations have pushed automakers to hybrids, plug-in hybrids and EVs. The shift has come at the expense of diesels, which are now largely absent from the small car segment. The days when you could buy a Volkswagen Polo or a Renault Clio with an oil burner.
Adding another nail to the coffin of the diesel engine are notable perks for electric vehicles, encouraging buyers to switch to hybrids and pure EVs. Green cars also generally benefit from lower taxes, yet another reason why the once-dominant diesel is dying out.
It’s also worth noting that the efficiency of petrol engines continues to improve, further closing the gap with diesels. Naturally, VW’s emission-enhancing devices only accelerated the decline. On top of that, the ongoing effort to reduce fleet emissions by ending the EU’s 2035 ban on new ice cars has further dented diesel sales.
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Source: Renault
Meanwhile, hybrids now account for more than a third of new car registrations in the EU+EFTA+UK region in the first ten months of the year. With a 34.7 percent market share, hybrids are comfortably ahead of gas cars (26.9 percent) and EVs (18.3 percent).
Looking ahead, the boom in electric cars is likely to continue, fueled by cheap Chinese imports and the arrival of new offerings from legacy automakers. Renault just introduced a charismatic Tongo, and VW will produce an ID. Polo next year before launching an entry-level model in 2027.
