Volkswagen Now Owns Half Of Germany’s EV Market By Knocking Tesla Out To 8th

After a brutal 2024 that saw Germany’s EV market nosedive following the axing of government subsidies, things are finally starting to bounce back and local carmakers are leading the charge. In the first quarter of 2025, every second EV sold in Germany wore a Volkswagen badge. Two out of every three electric cars registered came from German brands, showing a powerful return of domestic dominance in the wake of last year’s policy shakeup.

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It’s not just VW doing the heavy lifting. The comeback belongs to Germany’s broader automotive industry, including:? Audi, BMW, Porsche and even Opel are seeing growth in electric sales. Analysts from EY point to strong brand loyalty and trust as key reasons behind the resurgence. In a country where tradition and reliability matter, that’s no surprise. And after the slump, many German drivers seem ready to plug back in — but only with homegrown badges on the bonnet.

Tesla's slide continues

Meanwhile, Tesla has taken a sharp fall from grace. The Model Y, which once topped Germany’s sales charts, has now slipped to seventh place after a staggering 70% drop in sales. Even Hyundai has now overtaken Tesla in the rankings.

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What’s behind the decline? There’s no single culprit, but there’s plenty to unpack. Tesla’s model line-up is ageing fast, especially in a market that’s now full of fresh, affordable alternatives. Then there’s the growing discomfort with CEO Elon Musk, whose controversial political affiliations are making headlines — and not in a good way.

The broader picture is that while Germany’s EV market is recovering, Tesla is being left behind. It’s a remarkable turnaround for a company that once looked untouchable in the European EV scene.

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China’s EV surge stalls in Europe

And what about China? Despite the hype, Chinese EV makers still haven’t made a serious dent in Germany’s market share. According to EY, they’re holding just 2% of the local EV market. That's tiny compared to their dominance at home and is likely due to a mix of factors — unfamiliarity with the brands, lack of local support networks, and of course, EU tariffs that have made their cars more expensive than they need to be.

It’s not for lack of trying. Chinese EV brands have certainly made their presence known at motor shows and in the press. But when it comes down to showroom visits and actual sales, German buyers are staying loyal to the familiar names.

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Mercedes slips, Volkswagen steadies the wheel

While most German brands are enjoying a boost, there’s one notable exception — Mercedes-Benz. The luxury carmaker saw its domestic EV sales fall 8% and reported even steeper global losses. That’s in stark contrast to Volkswagen, whose EVs made up seven of the ten best-selling electric models in Germany in Q1.

Volkswagen’s overall sales in China dropped by 7.1% as local EV-only brands turned up the heat. The Chinese market has become a battlefield, and foreign automakers are feeling the pressure. But in Europe, VW’s fortunes look far brighter. Orders for both electric and combustion models jumped by 29% across Western Europe this year — a clear sign that buyers haven’t given up on the brand.

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VW says it’s preparing for more momentum, especially with new versions of the ID.3 and ID.4X rolling out soon. And it’s not stopping there. At this year’s Shanghai Auto Show, the company will unveil the first production model under its new Audi EV brand, plus three new electric VWs — one from each of its Chinese joint ventures with FAW, SAIC, and JAC. One of those, an electric SUV by SAIC, will even come with a range extender — a small petrol engine that charges the battery, helping to ease range anxiety for first-time EV buyers.