According to market researcher Dataforce (via Automotive News), Volkswagen reclaimed the top spot in Europe’s electric vehicle (EV) market in 2025, overtaking Tesla after a sharp rebound in battery-electric vehicle sales. The shift marks a major turning point in the region’s EV race and reflects bigger changes in competition, policy, and the role of carbon credits in the auto industry.

Europe remains one of the world’s most aggressive regions for electrification. Stricter emissions rules, rising fuel costs, and government incentives continue to push buyers toward electric cars. But the latest sales data shows that leadership in the EV market is no longer guaranteed for early pioneers.

Volkswagen’s EV Comeback Was Built on Scale and Choice

Volkswagen sold around 274,000 battery-electric vehicles in Europe in 2025, up 56% from the previous year. Tesla, by contrast, delivered roughly 239,000 units, a 27% decline year over year.

The reversal is striking. In 2024, Tesla outsold Volkswagen by nearly two-to-one. One year later, Volkswagen regained the crown by expanding its lineup and appealing to a wider group of buyers.

Several models drove the surge:

• The ID.4 electric SUV sold more than 80,000 units, rising nearly 24%.
• The ID.3 hatchback climbed over 44% to almost 79,000 units.
• The ID.7 sedan and wagon saw explosive growth of more than 137%, with over 76,000 units sold.

These results show the power of a broad portfolio. Volkswagen offered vehicles across different price points and body styles, from compact hatchbacks to family SUVs and premium sedans. That breadth helped it capture buyers who might not have considered Tesla’s narrower lineup.

Globally, Volkswagen Group said its battery-electric deliveries rose 32% to nearly 983,000 vehicles, even as total vehicle sales dipped slightly. Europe remained its core EV market and a key driver of its decarbonization strategy.

Tesla’s European Slowdown Signals a Competitive Shift

Tesla still led in individual models. The Model Y remained Europe’s best-selling single EV, with more than 151,000 registrations in 2025, although sales dropped sharply from the prior year. The Model 3 ranked among the top sellers but lost ground to new competitors like Skoda’s Elroq.

The company struggled across most major European markets. Germany, once Tesla’s strongest growth engine in Europe, saw registrations fall nearly 48% to around 19,000 units. Other large markets also reported declines, reflecting intense competition and shifting consumer preferences.

Norway was a rare bright spot. Tesla sales rose there as buyers rushed to secure incentives before policy changes expected in 2026.

The broader trend suggests that Tesla’s first-mover advantage is fading in Europe. Legacy automakers are catching up with competitive models, local manufacturing, and strong dealer networks.

Europe’s EV Boom Continues Despite Market Shakeups

Jato Dynamics data shows that Europe’s battery-electric vehicle market grew by about 30% in 2025, reaching roughly 2.6 million units sold. That growth came despite economic uncertainty, high interest rates, and uneven government subsidies.

Several factors drove adoption:

• Stricter EU emissions rules and fleet-average CO₂ targets
• Expanding charging infrastructure across major cities and highways
• Lower battery costs and improving vehicle range
• A wave of new models across mainstream and premium brands

Analysts say consumers now have more choice than ever. That diversity is accelerating the transition away from internal combustion engines.

The Global Competition Is Intensifying

Europe is only one battleground. Globally, competition is heating up even faster.

China’s BYD delivered more than 2.2 million battery-electric vehicles in 2025, surpassing Tesla’s roughly 1.6 million units. The Chinese automaker has rapidly expanded its lineup and global footprint, positioning itself as a serious rival in both emerging and developed markets.

In Europe, BYD still trails established brands like Volkswagen, BMW, Hyundai, and Kia. But its rapid growth signals that the global EV market is becoming more fragmented and competitive.

This competition could benefit consumers by lowering prices and accelerating innovation. It could also put pressure on margins across the industry, making carbon credit revenue and government incentives even more important to profitability.

Volkswagen-Tesla Shift Highlights Scale vs. Innovation

For investors, the Volkswagen-Tesla shift highlights two competing EV strategies.

Tesla (TSLA stock) represents innovation-driven growth. It leads in software, autonomous driving, and charging infrastructure. Its carbon credit revenue and energy business provide additional income streams.

Volkswagen represents a scale-driven transition. It has massive manufacturing capacity, strong brand recognition, and deep relationships with European consumers and regulators. Its ability to rapidly expand EV production shows how legacy automakers can pivot when policy and market conditions align.

The broader trend suggests that the EV market will not be winner-takes-all. Instead, it will be shaped by multiple players with different strengths, from Chinese manufacturers to European incumbents and U.S. tech-driven automakers.

• LATEST: Tesla Reports First-Ever Annual Revenue Drop in 2025, Carbon Credit Sales Also Dip 28%

Sustainability Strategies Are Becoming a Core Battleground

Volkswagen’s comeback is not just about sales numbers. It reflects a broader sustainability strategy. The company has committed to net-zero emissions across its operations and supply chain, with heavy investments in renewable energy, battery recycling, and low-carbon manufacturing.

The company is expanding battery production in Europe, using renewable electricity at several facilities. It is also working to reduce lifecycle emissions, including raw material sourcing and end-of-life recycling.

Tesla remains a leader in vertical integration, software, and battery efficiency. Its vehicles often have lower lifetime emissions compared to internal combustion cars, especially in regions with clean electricity grids. Tesla also invests in energy storage, solar, and charging infrastructure, reinforcing its clean energy ecosystem.

However, Europe’s focus is shifting toward lifecycle emissions, not just tailpipe emissions. That includes mining, manufacturing, logistics, and recycling. Automakers that can decarbonize their entire value chain may gain a competitive advantage in future regulations and carbon markets.

What This Means for Europe’s Climate Goals

Europe aims to cut transport emissions sharply by 2030 and reach net zero by 2050. Road transport remains one of the largest sources of emissions, making EV adoption critical.

Volkswagen’s surge in EV sales supports these goals by displacing internal combustion vehicles at scale. Tesla’s presence continues to push technology and infrastructure forward. Competition among brands accelerates innovation and lowers costs, thereby increasing adoption.

Carbon markets add another layer of accountability. Automakers that fail to reduce emissions face financial penalties or must buy credits, creating a strong incentive to electrify fleets.

ICCT findings reveal the critical impact of policies adopted in the past 3 years. Road transport emissions in the European Union were projected to peak at nearly 800 million tonnes of CO₂ in 2025 and decline thereafter by around one-quarter by 2035. This accelerated decline reflects the impact of the transition from conventional cars to zero-emission vehicles.

Europe Road Emissions 

Tesla still leads in technology and brand recognition. But Volkswagen’s scale, product range, and regulatory alignment are proving powerful in Europe’s policy-driven environment.

As global competition intensifies and carbon markets evolve, the EV industry will increasingly be shaped by sustainability strategies, regulatory compliance, and lifecycle emissions performance.

Volkswagen’s rise past Tesla in Europe is more than a sales milestone. It is a sign that the clean mobility transition is entering a diverse and competitive phase. Automakers that combine scale, innovation, and carbon strategy will shape the future of transportation—and the future of carbon markets.

• ALSO READ: BYD Overtakes Tesla as World’s Biggest EV Seller in 2025 

The post Volkswagen Overtakes Tesla in Europe’s EV Market: A Turning Point for Clean Mobility appeared first on Carbon Credits.

Global investment in clean energy reached a new high of $2.3 trillion in 2025, according to a major industry report. This total was 8% higher than in 2024, showing that investment in low-carbon technologies continued to grow despite economic uncertainty. Researchers say this shows the global interest in cutting greenhouse gas emissions and creating cleaner energy systems.

The figures come from the BloombergNEF Energy Transition Investment Trends 2026 report. BloombergNEF is a leading research provider that tracks investments in clean energy technologies and infrastructure.

The clean energy transition includes technologies such as renewable power, electric vehicles (EVs), grid improvements, energy storage, and climate-related tech companies. Together, these areas attracted record funding.

Breakdown of the $2.3 Trillion Investment

The global total of $2.3 trillion in 2025 covered several key clean energy sectors:

• Electric transport: The largest category, with $893 billion invested. This includes electric vehicles and charging infrastructure, which are expanding rapidly around the world.
• Renewable energy: About $690 billion went into renewable power such as wind, solar, and other clean sources. This was slightly lower than the previous year due to changing regulations in China’s power markets.
• Power grids: Investment in grid systems reached $483 billion in 2025. This spending supports the transmission and distribution of clean energy.
• Emerging sectors: Hydrogen received $7.3 billion, and nuclear energy received $36 billion.

Although total investment grew, renewable energy funding itself was down nearly 9.5% compared with 2024. This decline was mainly due to new regulatory rules in China, the world’s largest clean energy market.

Overall, clean energy spending has outpaced fossil fuel investment for a second year in a row. Fossil fuel supply investment fell by $9 billion in 2025, mainly due to reduced spending on oil and gas production and fossil power plants.

Regional Power Plays: Who’s Investing Where

Investment levels differ greatly by region. This shows the impact of policy, industry structure, and economic growth.

In the Asia Pacific, investment accounted for nearly 47% of the global total in 2025. China stayed the top market, investing around $800 billion in clean tech. This was despite some drops in its renewable sector.

India saw investment grow by 15%, reaching around $68 billion in 2025. The increase was driven by renewables, grid upgrades, and electrification projects.

The European Union grew its investment by 18% to about $455 billion, making it a major contributor to the global increase.

In the United States, investment increased by 3.5% to about $378 billion. This rise happened even though some federal policies slowed support for certain clean energy programs.

These patterns show that all regions invest in clean energy. However, the pace and focus vary based on local strategies and market conditions.

• SEE MORE: Renewables 2025: How China, the US, Europe, and India Are Leading the World’s Clean Energy Growth

Trends Driving Clean Energy Investment

• Electrified Transport Leads

Investment in electric transport, like EVs and charging stations, is now a key player in clean energy spending. In 2025, this area alone attracted $893 billion, making it the top category of global investment.

Electric vehicles are growing fast as battery costs fall and more models become available. Many countries and companies have set targets to phase out fossil fuel vehicles, which boosts demand for EV infrastructure.

• Renewable Power and Grids

Even though renewable investment dipped slightly, it still remained a large portion of the total. The $690 billion invested in renewables in 2025 supports new solar, wind, and other clean power plants.

Investment in power grids also grew, reaching $483 billion. Upgrading grids is essential to connect more clean energy to the places that need it. These upgrades include transmission lines, smart grid technologies, and energy storage systems.

• Clean Tech Supply Chains and Finance

Investment in factories and supply chains for clean tech also expanded. In 2025, spending on clean energy supply chains reached $127 billion, a 6% increase from 2024. These funds went to battery factories, solar equipment production, and mining for battery metals.

Equity funding in climate-tech companies also rebounded strongly, rising to $77.3 billion — a 53% increase from the previous year. This was the first year of growth in equity funding after several years of decline.

In addition, energy transition debt issuance, loans, and bonds to finance clean energy projects reached $1.2 trillion, up 17% from 2024. This reflects strong interest from both public and private financiers.

Historical Context and Recent Growth

Clean energy investment has been growing steadily over the past decade.

In 2024, global energy transition investment reached about $2.1 trillion, surpassing the $2 trillion mark for the first time. This total was driven by electrified transport, renewable power, and grid investment.

In 2023, investment in clean energy surged to around $1.77 trillion, reflecting rising spending despite geopolitical challenges and market pressures. Electrified transport and renewables both hit new highs that year.

The jump to $2.3 trillion in 2025 continues this long-term growth trend, even though the rate of growth has slowed compared with earlier years. The annual increase dropped from more than 20% several years ago to 8% in 2025 as markets matured and conditions shifted.

Looking Ahead: The Road to $2.9 Trillion

Analysts expect clean energy investment to keep rising in the near term, though uncertainties remain.

BloombergNEF’s base-case scenario shows that global energy transition investment might hit about $2.9 trillion annually over the next five years. This will be above 2025 levels. It shows ongoing interest from both governments and companies.

The International Energy Agency (IEA) offers a broader forecast for total energy investment in 2025. Overall energy investment could reach around $3.3 trillion. This includes spending on both clean and fossil fuels. Clean technologies are expected to get over $2.2 trillion of that total. This would mean clean energy investment continues to outpace fossil fuel spending.

Experts see these future figures as good signs. However, they say annual investment must grow a lot to reach long-term climate goals, like those in the Paris Agreement. To meet net-zero by 2050, analysts say the world may need to invest over $5 trillion each year by the end of this decade.

What The Record Spend Means for the Energy Transition

The $2.3 trillion clean energy investment in 2025 shows that countries, companies, and investors around the world continue to fund the energy transition. These funds support low-carbon technologies that reduce emissions and improve energy security.

Investment in electric transport helps shift away from fossil fuel vehicles. Renewable energy funding builds new wind and solar capacity. Grid and storage investment enables that power to reach homes, businesses, and industries.

Regional investment patterns show strong gains in the Asia Pacific, Europe, India, and the United States. However, China saw a slight drop in renewable energy funding.

The clean energy transition remains robust, though overall growth rates have slowed compared with earlier years. The trend also shows that climate goals are now a key part of economic and infrastructure strategies. Forecasts indicate a continued expansion of clean energy investment soon. However, meeting long‑term climate targets will need even greater flows of capital across all regions.

• READ MORE: Japan to Invest US$1.34B on Clean Power to Spur Energy Transition

The post Clean Energy Investment Hits Record $2.3T in 2025 Says BloombergNEF: What Leads the Surge? appeared first on Carbon Credits.

Microsoft reported strong results for the second quarter of fiscal 2026, ending December 31, 2025. The company’s total revenue was $81.3 billion, up 17% from the $69.6 billion reported in the same period last year.

Net income, the profit after expenses, was $38.5 billion. This figure rose 60% from about $24.1 billion in the second quarter of fiscal 2025. Microsoft also reported a diluted earnings per share (EPS) of $5.16. This was up 60% from $3.23 per share in the prior year. Operating income also increased by 21% year over year to was $38.3 billion. 

The tech giant also reported large growth in its cloud and AI-related businesses. Revenue from Microsoft Cloud reached $51.5 billion in the quarter. This was an increase of 26% compared with the prior year.

Breaking this down:

• Intelligent Cloud revenue was $32.9 billion, up 29%.
  
• Productivity and Business Processes revenue was $34.1 billion, up 16%.
  
• More Personal Computing revenue was $14.3 billion, down 3%.
  

The company also reported its remaining performance obligations, future contracted revenue yet to be recognized, at $625 billion. This was up 110% compared with the same time last year.

Microsoft continued to return cash to shareholders. In the quarter, it returned about $12.7 billion through dividends and share buybacks — an increase of about 32% year over year.

These results show that Microsoft continued to grow across major business segments in Q2 FY 2026. Cloud services and AI-related products remained key drivers of revenue growth. At the same time, personal computing revenue, which includes Windows licensing, Surface devices, and search advertising, experienced a small decline.

Despite these robust results, Microsoft’s stock fell about 11% after the earnings. It dropped by $52.95 to close around $428.68 in late trading after hitting a low of $421.11. This is due to investors’ concerns about slow cloud growth and high spending on AI.

Alongside its strong financial performance, Microsoft is also taking major strides in its environmental commitments.

Carbon Removal Leadership: Doubling Impact in 2025

Sustainability remains central to Microsoft’s strategy. In 2025, the company more than doubled its carbon removal agreements to 45 million metric tons of CO₂, up from 22 million tons in 2024.

These purchases include a mix of nature-based solutions. They cover forestry and soil carbon projects, plus direct air capture technologies. The agreements span North America, Europe, and Africa, targeting high-quality, verified removal credits with long-term permanence.

• SEE MORE: Microsoft More Than Doubles Carbon Removal Deals to 45 Million Tonnes in 2025

Microsoft’s move reflects a broader trend among tech giants committing to net-zero and carbon-negative strategies. Other big buyers are Amazon, Google, and Stripe. They’re investing in carbon removal to offset emissions that can’t be cut yet.

By securing long-term offtake agreements, Microsoft ensures these projects receive funding to scale operations and deliver measurable climate impact. Analysts predict that global corporate carbon removal purchases might exceed 150 million metric tons each year by 2030. This shows a fast-growing market that mixes corporate sustainability goals with investment chances.

AI’s Hidden Cost: Data Centers and Water Demand

Microsoft also released projections on AI-driven data center water consumption. With AI workloads surging, water use in Microsoft’s global data centers is expected to rise 150% by 2030 compared with current levels. That’s equal to using about 18 billion liters over the said period. 

The increase is mainly due to liquid cooling systems used to maintain GPU and CPU performance in AI servers. Water is essential to prevent overheating and maintain efficiency. Microsoft’s water needs are spiking hardest in dry areas.

• In Phoenix (hit by 20 years of drought), the company cut its 2030 estimate from 3.3 billion liters to 2 billion by running hotter data centers.
• Near Jakarta, Indonesia (a sinking city with drained underground water), the forecast dropped from 1.9 billion to 664 million liters.
• In Pune, India (where shortages caused protests and a “No Water, No Vote” push), it fell from 1.9 billion to just 237 million liters—Microsoft wouldn’t say why.

As AI adoption grows, data centers will consume more energy and water, especially in regions with concentrated cloud infrastructure.

Microsoft is now exploring solutions such as:

• Advanced cooling technologies to reduce water intensity per compute unit
  
• Use of recycled water in data centers where feasible
  
• AI-driven energy and resource optimization to manage electricity and water demand
  

The company emphasizes that AI deployment must be balanced with sustainability practices, ensuring growth does not lead to unsustainable water consumption or carbon emissions.

• MUST READ: AI Drives a Transformative Wave in Global Data Centers – and Energy Is the Real Bottleneck

Where Growth Meets Responsibility

Microsoft’s Q2 results show that growth and sustainability are connected. Investments in AI, cloud, and enterprise services boost revenue while increasing resource demand. The company’s carbon removal goals and energy-efficient data center plans help reduce environmental impacts.

Key metrics illustrate this balance:

• Revenue growth of 9% year-over-year
• Cloud revenue of $30.5 billion, up 12%
• Carbon removal agreements totaling 45 million metric tons
• Projected AI data center water increase of 150% by 2030

These initiatives demonstrate that Microsoft is trying to align profitability with long-term climate goals. Investing in clean technology, energy efficiency, and carbon removal shows that big companies can grow responsibly. This approach also helps reduce environmental impacts.

What Comes Next for AI, Climate, and Capital

Microsoft expects AI adoption to boost demand for:

• Data center capacity
• Cloud computing
• Specialized hardware like GPUs

Analysts predict the global AI data center market could double by 2030, creating both financial and sustainability challenges.

The carbon removal market is also expected to expand. With 45 million tons already contracted, Microsoft’s continued leadership signals corporate influence in scaling carbon removal projects.

Forecasts show that voluntary carbon removal deals might exceed $15 billion each year by 2030. This growth is mainly due to tech companies, industrial firms, and financial institutions.

Water management in data centers is another critical area. Companies need to invest in better cooling and recycled water solutions to help meet rising demand while protecting local water resources. Microsoft’s transparency around water use provides a model for responsible AI deployment globally.

Overall, Microsoft’s earnings report not only reflects strong financial performance but also highlights the company’s sustainability leadership. Growth, carbon removal, and AI infrastructure are linked. They provide insights for companies like Microsoft trying to balance profit with environmental responsibility.

• READ MORE on Microsoft’s carbon removal deals:
  • Microsoft’s Mega Move: 18 Million Carbon Credit Deal with Rubicon Carbon
  • Microsoft’s $800M Carbon Removal Deal Sets Record in Climate Fight
  • Microsoft Buys 2 Million Tons of Carbon from Rubicon Carbon’s Uganda Forestry Project
  • Peatland Carbon Credits: Microsoft Invests in Pantheon to Restore Peatlands for Durable Carbon Removal
  • Big Tech Firms Microsoft (MSFT) and Alphabet (GOOGL) Lead in Durable Carbon Removal Investments Exceeding $10 Billion

The post Microsoft Q2 FY26 Earnings: $81B Revenue, AI Momentum, and a 150% Jump in Water Use by 2030 appeared first on Carbon Credits.