Battery-electric vehicles took 34 percent of new-car registrations in 12 major European markets in October, a record share that is straining supply and squeezing automaker margins.

In Germany, Europe’s largest auto market, BEVs reached a record 37 percent share as higher fuel prices and the arrival of more affordable models accelerated the shift away from gasoline and diesel vehicles.

The surge is a milestone for Europe’s electrification push, but it is arriving faster than some automakers’ battery supply and cost structures can comfortably handle.

Automakers warned that the rapid transition to electric mobility is weighing on profitability because BEV margins are below those of internal-combustion vehicles.

BEV demand is being driven by mass-market electric cars launched by European automakers, including the VW ID Polo and Renault 5, along with competitive BEVs from Chinese companies such as BYD.

Official registration data for the EU, U.K. and EFTA countries will not be released until later in November. However, figures already published in 12 countries that represent more than 83 percent of the region’s market suggest the momentum that emerged in the third quarter continued in October.

BEV sales in the 12 markets rose 57 percent during the month to reach a 34 percent market share, up from 22.4 percent in October 2025, according to an Automotive News Europe analysis. BEV penetration averaged 21 percent in the first half of 2026 before steadily increasing through the third quarter and reaching 33 percent in September.

In the first 10 months of 2026, BEV sales increased 44 percent to 2.63 million vehicles, while the overall market grew 6 percent. As a result, BEV market share rose to 27 percent from 20 percent a year earlier.

BEV sales surge in Germany, UK

Germany was among the fastest-growing EV markets in October. BEV registrations rose 79 percent to 94,086 vehicles, accounting for a record 37 percent of monthly sales. Through October, battery-electric vehicles represented 28.2 percent of the German market, up nearly 10 percentage points from 2025.

The VDA industry association said government incentives for private buyers continued to support BEV demand. According to Germany’s Environment Ministry, €3 billion has been allocated for BEV subsidies from 2026 through 2029. By Oct. 1, €432 million had been paid out through the Federal Office for Economic Affairs and Export Control.

Matthias Schmidt, an analyst with Schmidt Automotive, said renewed BEV purchase incentives in Germany and France helped drive growth in the latest quarter, alongside favorable year-earlier comparisons.

In the U.K., BEVs captured 32.7 percent of registrations in October, up 6.5 percentage points from the same month in 2025. Through October, BEVs held a 27 percent share of the market, compared with 22 percent a year earlier.

France also remained a strong BEV market. Battery-electric registrations totaled 61,958 in October, giving BEVs a 41.5 percent market share, only slightly below September’s record 41.7 percent. Through October, BEVs accounted for 32 percent of French registrations, compared with 20 percent in 2025.

Italy continues to trail

Italy remained the weakest major European BEV market. Battery-electric vehicles accounted for just 6 percent of registrations in October, down from about 8 percent through September, as the impact of incentives introduced in late 2025 faded. BEVs also represented about 6 percent of the Italian market in 2025.

Spain, another traditionally slower adopter of BEVs, posted a 16.7 percent BEV share in October, down slightly from September’s record level but well above the 9.4 percent share recorded a year earlier.

Several smaller markets continued to post some of Europe’s highest EV penetration rates. BEVs accounted for 55 percent of registrations in the Netherlands, 51 percent in Sweden and 49 percent in Belgium.

Demand outstrips supply at Mercedes, VW

Rapid growth in BEV demand is beginning to create supply bottlenecks for some automakers.

Mercedes-Benz said its electric GLC midsize SUV is sold out in Europe for the remainder of 2026 because of exceptionally strong demand. For some configurations, customers placing orders now may have to wait until the third or fourth quarter of 2027 for delivery.

Volkswagen Group has also reported stronger-than-expected demand for its new entry-level EVs. Orders for the ID Polo exceeded 30,000 by early September, while the Cupra Raval accumulated more than 51,000 reservations. The automaker said demand could lead to extended waiting times for some versions.

VW Group’s Seat, which builds the ID Polo and Raval at its Martorell factory near Barcelona, was forced to cancel some shifts in late October because of a shortage of battery cells supplied by VW Group’s PowerCo battery division.

BEV growth weighs on profitability

Automakers are also grappling with the financial consequences of the accelerating shift to BEVs.

During VW Group’s third-quarter earnings call on Oct. 29, CFO Arno Antlitz said the company’s BEV transition is occurring faster than anticipated. The group’s order book now consists of about 40 percent BEVs, a level it had originally expected to reach only in 2029.

Till Conrad, head of marketing at Toyota Europe, said battery-electric vehicles still generate lower margins than hybrids and conventional vehicles, although falling battery costs should help close the gap.

Incentives for battery-electric cars are distorting the market, Conrad told Automotive News Europe with BEV support levels roughly double those required for other powertrains. Heavy reliance on incentives, from governments and manufacturers, also affects residual values of vehicles returning from lease fleets, he said.

VW Group’s Antlitz said the automaker experienced a negative mix effect in the third quarter and expects additional pressure in the fourth quarter and into the first half of 2027.

He said the shift in ICE/BEV mix is diluting margins in the short term and VW Group expects to achieve cost and margin parity between BEVs and combustion-engine vehicles around 2030 with the introduction of its SSP software-defined architecture. Currently, the ID Cross small SUV generates about 70 to 80 percent of the margin of an equivalent combustion model, while smaller vehicles such as the ID Polo are less profitable, Antlitz said.