Swedish Auto Market in 2025 is decelerating. Full-year sales grew 1.5%, continuing trend of decrease after H1 boost. Volkswagen posted largest gains while Tesla plummeted from 3rd into 11th, losing its role of EV leader.
Economic Environment
In 2025, Sweden’s economy is projected to grow by 1.6%, marking the start of a gradual recovery supported by fiscal stimulus, stable monetary policy, and strengthening domestic demand. Economic growth is expected to accelerate to 2.6% in 2026 before easing slightly to 2.3% in 2027, driven mainly by rising private consumption, rebounding residential investment, and higher public spending on defence, infrastructure, and the green transition. Inflation, which peaked at 2.8% in 2025, is forecast to fall sharply to around 1.1% in 2026 due to temporary tax cuts, before returning to the 2% target by the end of 2027.
The labour market is set to improve gradually, with unemployment declining from 8.7% in 2025 to about 8.2% by 2027, although external demand weakness continues to weigh on exports. Fiscal policy will remain expansionary in the near term, with the budget deficit widening in 2026 and public debt rising moderately, while risks to the outlook stem from global trade headwinds and cautious household spending.
Automotive Industry Trend and Outlook
While growth in the Swedish Car Market remains positive, the trend of expansion has been decelerating compared to the boom in earlier months. Full-year sales in 2025 gained 1.5% to 272,919 units.
Brand-wise, Volvo continues to hold onto its leadership (+4.3%) with a 17.9% share. Volkswagen followed in 2nd with 14.2% (+32.7%) while Toyota -up 1 spot- ranked 3rd with 8.1% (+5.9%).
Kia -up 1 spot- ranked 4th (+4.1%) followed by Mercedes in 5th -up 1 spot- (+2.5%) and Skoda -up 2 spots- in 6th (+24.5%).
In 7th BMW -up 2 spots- gained 19.7%, ahead of Audi -down 1 spot- in 8th (+2.5%), Peugeot which rose 1 spot and ranked 9th (-4.8%) and Polestar, growing 1 spot into 10th (+28.8%).
Notably, Tesla fell 8 spots from 3rd into 11th (-66.9%).
Looking at the ranking of the best selling cars, widely reported in the dedicated post, the leader became the Volvo XC60 -up 1 spot- (+29.5%) followed by the Volvo XC40 -up 1 spot- (+35.2%) and the Volkswagen ID.7 -up 13 spots- (+140.9%).
EV Market Trend and Outlook
Sweden’s EV sector mantains upward trajectory in 2025, with full year sales increasing by 2.6%. to a 97% share. As EVs now constitute almost the entirety of the market, policymakers are focusing on improving access to electric vehicles for households most affected by rising transport costs.
Volkswagen led this surge, achieving a remarkable 45.3% rise in EV sales and climbing 1 spot, driven by the strong performance of the ID.7 model. Kia impressed gaining 3 spots and rising 112.8%. Volvo and Polestar followed while Tesla fell 59.2% from 1st into 5th.
Medium-Trend Market Trend
The Swedish automotive market dropped 14.3% over the 2014-2024 decade. Starting with 313,905 units in 2014, passenger car sales peaked in 2017 with a 23.32% rise. In 2018-2019, the market faced challenges, bringing sales to 355,000 at the start of 2020. The COVID-19 pandemic led to a significant dip in new registrations, falling below 300,000 units with a decline of 18%.
In 2021, the Swedish passenger car market showed signs of recovery, reporting a 3% increase with sales reaching 300,000 units. However, 2022 presented challenges as the market struggled to maintain high demand, due to a push towards electrification and other global macroeconomic factors, resulting in a 4.4% decrease to 287,610 sales. The downturn continued into 2023, with the overall market experiencing a double-digit decline. In 2024, sales contracted further, decreasing by 7%.
Despite overall market challenges, the Swedish electric vehicle market reported impressive growth from 2014 to 2024. Sweden was among the early adopters of EVs in Europe, and after a dip in 2019, the sector recovered and continued to expand steadily in 2021 and 2022. After peaking at 81,795 units in 2023, EV sales dropped by 10.2% in 2024, primarily due to the removal of government subsidies for battery electric vehicles, which affected affordability and slowed demand growth.
Tables with sales figures
In the tables below we report sales for all Brands, top 10 Manufacturers Group, and top 10 Models.
