(March 25): European car sales declined the most in five months in February as uncertainty about the economy prompted consumers to hold back on bigger purchases.

New-car registrations fell 3.1% from a year earlier to 963,540 units, the European Automobile Manufacturers’ Association said Tuesday. Spain was the only major market in the region to see a rise in sales, which included a 61% jump in electric vehicle registrations.

The overall drop was driven by a 24% decline in purchases of gasoline-powered vehicles and a 28% decrease in those with diesel engines. Battery-powered and hybrid-electric cars gained.

Europe’s carmakers are facing another tough year in their home market as a prolonged downturn in the region’s biggest economies weighs on consumer confidence. At the same time, the threat of US tariffs and intense competition from Chinese automakers led by BYD Co are adding to the pressure.

EVs offered a bright spot across the region, with sales rising 26% as carmakers promoted them to comply with tighter emissions regulations. That growth didn’t extend to Tesla Inc, which saw new registrations plunge 40% in the region as consumers continued to sour on CEO Elon Musk’s politics and support of the right-wing Alternative for Germany party.

Automakers are trying to win over customers with cheaper battery-powered models, including Renault SA’s €25,000 (RM119,902.58) R5 E-Tech and Stellantis NV’s €23,300 Citroën ë-C3 city car. They’re competing with offerings from Chinese manufacturers pushing into the region including BYD, Nio Inc and Xpeng Inc.

Volkswagen AG, Europe’s biggest carmaker, expects to maintain profitability this year but is exposed to planned US tariffs on Mexico and Canada, as is Stellantis NV. Mercedes-Benz Group AG and BMW AG expect margins to shrink due to price pressures in China and the trade tensions.

It’s unclear whether higher growth in EV sales will continue after the EU decided in early March to give carmakers more time to reach stricter CO2 emissions targets. Volkswagen, Stellantis and Renault are positioned to get the biggest boost from the change.

With the exception of France, EV sales soared in Europe’s biggest markets. Germany saw a 31% increase in new battery-powered vehicle registrations while Italy recorded a 38% gain and the UK a 42% jump.

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