New car sales in the Netherlands rose in September, with 4.4% more registrations than a year ago, industry groups BOVAG and the RAI Vereniging said on Wednesday. Despite a stronger third quarter, the total number of registrations so far this year is still 3% lower than last year.

The sector registered 32,199 cars last month, almost half of them hybrids. Fully electric vehicles also performed well, even though Tesla sales halved compared with last year. Analysts link the decline to global criticism of CEO Elon Musk’s political activities.

Despite the sharp drop, the Tesla Model Y remained the most registered model in September, followed by the Kia Picanto and Skoda Elroq. Toyota, Kia and Volkswagen topped the list of brands, supported by a broad range of models.

BOVAG and the RAI Vereniging said they are more optimistic about the sector than earlier this year, when sales fell around 10% in the first quarter. They expect a surge in registrations in the final months of 2024 as tax benefits for electric cars are gradually phased out.

“Company drivers can still make use of the favourable 17% tax rate on electric cars until January 1, 2026,” BOVAG chairman Bert de Kroon said. “After that, you pay the standard 22% rate, the same as for petrol or diesel cars.”

The lower rate applies this year to part of the purchase price of an electric vehicle, but remains valid for up to 60 months after registration. This allows drivers to benefit from reduced tax on their car for several years.