Car companies are promoting sales in compliance with emissions regulations, with electric car sales in Europe surging by 37% in January.

European electric car sales increased by 37% last month as car manufacturers are promoting battery-driven cars to comply with stricter emission regulations this year. The European Automobile Manufacturers' Association said on Tuesday that electric car sales surged in markets such as Germany, the UK, and Italy in January. The overall sales in the region decreased by 2.1% due to a decline in demand for plug-in hybrid, gasoline, and diesel models. European car manufacturers are facing another challenging year as stricter EU emission targets force them to sell more electric cars or face fines. They are also threatened by additional tariffs imposed by President Trump during his tenure, following the competition impact in the Chinese market. Electric cars had a strong performance in January, which may relieve some sales pressure in the industry. According to reports on Monday, France is pushing for greater flexibility from the EU for car manufacturers to meet this year's emission targets. A senior executive at Renault stated last week that he "100% believes" the EU Commission will relax regulations to protect local manufacturers. Friedrich Merz, who won the election on Sunday, will become Germany's next Chancellor. He believes that the sales of new internal combustion engine cars should continue after the gradual phase-out planned for 2035. For several months, car manufacturers have been warning that they may have to pay billions of euros in fines for failing to meet EU emission targets. Alternative solutions being discussed include introducing a compliance period of several years, or allowing manufacturers to deposit or borrow carbon dioxide credit quotas over a period of years. The EU Commission has been negotiating with the industry and will present an action plan on March 5th. Several companies have already disclosed their intentions to collaborate with electric car manufacturers to help them comply with regulations. Tesla, Inc. plans to form a joint venture with car manufacturers such as Toyota, Ford, and Stellantis. The company saw a 45% decrease in sales in Europe last month. Mercedes-Benz Group plans to collaborate with Volvo and Polaris Inc. (Polestar). Stellantis is looking for a new CEO and will announce its performance on Wednesday, with a 16% decline in sales in the European region. Volkswagen and Renault saw an increase in sales, while BMW's new car sales declined. In January, Tesla, Inc. experienced a 45% plummet in sales in Europe, while its competitors saw significant growth in electric car sales. The latest data from the European Automobile Manufacturers' Association shows that the electric car company led by Musk registered only 9,945 vehicles in Europe in January, far below the 18,161 vehicles in the same period last year. Tesla, Inc. registered only 1,277 new cars in Germany last month, the lowest monthly sales since July 2021. In France, its sales plummeted by 63%, marking its worst performance since August 2022. In addition, Tesla, Inc. was surpassed by BYD Company Limited (01211) for the first time in terms of new car registrations in the UK. Despite a 42% growth in the electric car market in the UK last month, Tesla, Inc.'s sales dropped by nearly 8%. Meanwhile, more customers are starting to shift towards cars that are supported by batteries in addition to internal combustion engines. Sales of non-plug-in hybrid cars increased by 17% last month.