Diesel’s Death Spiral: PHEVs Outsell Oil-Burners in Europe for the First Time

Plug-in hybrids have officially buried diesel in Europe’s powertrain hierarchy. For the first time in automotive history, PHEVs outsold diesel vehicles across the continent through October 2025, according to data from the European Automobile Manufacturers’ Association.

The milestone marks another grim chapter in diesel’s decade-long collapse, a downfall that began with Volkswagen’s emissions-cheating scandal in 2015 and shows no signs of reversing.

PHEVs Claim the Podium as Diesel Crashes to Fourth Place

The numbers tell a brutal story for diesel loyalists.

Plug-in hybrids captured 9.4% of new car registrations across the EU, EFTA countries, and the UK through October 2025. Diesel limped in at just 8%, according to Motor1.

That’s a staggering fall from grace. At their peak in the 2010s, diesels commanded more than 50% of European new car sales.

The switch didn’t happen overnight. By the end of Q2 2025, PHEVs had already pulled ahead of diesels in buyer preference. The gap will likely widen through year-end, and it’s hard to imagine diesel ever reclaiming a podium spot.

The Powertrain Pecking Order in 2025

Hybrids now dominate Europe’s car market with a commanding 34.7% share through October. Gasoline follows at 26.9%, with battery-electric vehicles holding 18.3%.

PHEVs slot in fourth at 9.4%, just ahead of diesel’s 8%.

ACEA’s EU-only data shows the race even tighter: PHEVs at 9.1% versus diesel at 9.2%. The broader European figures, which include highly electrified markets like Norway and the UK, push PHEVs definitively ahead.

Meanwhile, petrol and diesel combined have collapsed to just 36.6% of the EU market, down from 46.3% over the same period in 2024.

How Dieselgate Killed a Powertrain

Diesel’s decline follows a predictable trajectory that accelerated after Volkswagen’s 2015 emissions scandal.

In 2017, gasoline cars outsold diesels for the first time since 2009. Self-charging hybrids overtook diesel in 2021. Pure electric vehicles claimed higher market share than diesel in 2022.

Now PHEVs have delivered the final blow, pushing diesel to fourth place.

Several factors contributed to diesel’s spectacular collapse. Stringent emissions regulations pushed automakers toward electrified powertrains. Diesels have largely disappeared from the small-car segment where they once thrived.

“The days when you could buy a Volkswagen Polo or Renault Clio with an oil-burner are long gone,” Motor1 noted.

Government incentives for electrified vehicles and lower taxes on greener cars added more nails to diesel’s coffin. Meanwhile, gasoline engines continued improving efficiency, eroding diesel’s traditional fuel-economy advantage.

The EU’s 2035 Ban Looms Over Everything

The European Union’s commitment to banning new internal combustion engine sales by 2035 has fundamentally reshaped automaker strategies.

Manufacturers face billions in potential fines if they miss increasingly strict CO2 fleet emission targets. PHEVs offer a profitable middle ground: they count toward electrification targets without requiring the massive battery investments that make pure EVs unprofitable for many automakers.

PHEV registrations in the EU surged 43.2% year-over-year in October alone, the highest growth rate of any powertrain. Spain led the charge with a 109.6% increase, followed by Italy at 76.5% and Germany at 63.4%.

The PHEV boom reflects economic reality more than consumer preference. Automakers need these vehicles to survive the regulatory transition.

EVXL’s Take

Diesel’s fall from 50% market share to single digits in barely a decade represents one of the most dramatic powertrain collapses in automotive history. And the irony couldn’t be thicker.

The same German automakers whose emissions-cheating scandal triggered this collapse are now lobbying Brussels to weaken the very EV targets they initially endorsed. As we reported just yesterday, German automakers are gaming their EV registration numbers while simultaneously arguing that 2035 electrification targets are “no longer achievable.”

BMW CEO Oliver Zipse has called the 2035 ban “a big mistake.” Mercedes-Benz CEO Ola Källenius warned that European automakers are “heading at full speed against a wall” if regulations aren’t reconsidered. The VDA, Germany’s automotive lobby, argued that “the end of the combustion engine cannot be realised in this way.”

These are the same companies that backed the 2035 ban as “ambitious but achievable” just three years ago.

The PHEV surge isn’t a consumer revolution. It’s a corporate survival strategy. As we documented in our coverage of Europe’s September PHEV boom, automakers are flooding the market with plug-in hybrids because they check regulatory boxes without requiring the massive battery investments that make pure BEVs unprofitable. PHEVs represent the path of least resistance for manufacturers caught between tightening emissions rules and consumers unwilling to pay premium EV prices.

The implications extend beyond diesel’s demise. ACEA warned that battery-electric market share, while growing at 16.4% year-to-date, remains “still below the pace required at this stage of the transition.” Europe is choosing profitable hybrids over money-losing pure EVs, which raises uncomfortable questions about whether the continent will actually meet its 2035 zero-emission targets.

Looking ahead, affordable Chinese EVs and new European entries like the Renault Twingo and Volkswagen’s upcoming ID. Polo could reshape the market again. But for now, Europe’s electrification is proceeding via the PHEV compromise rather than the pure-EV revolution regulators envisioned.

Diesel had a good run. But when the same companies that built their empires on oil-burners decided to cheat emissions tests, they signed diesel’s death warrant. The only question remaining is whether PHEVs are a bridge to full electrification or a detour that delays Europe’s zero-emission future.