The European Commission is expected to announce tomorrow a major revision to the European Union’s law banning sales of new combustion-engine cars from 2035, responding to pressure from Germany, Italy, and major European automakers facing competition from Chinese and US rivals.
Details of the revision are still being finalised by EU officials, but industry and government sources indicate the effective ban could be delayed by five years or modified indefinitely. The 2023 law requires all new cars and vans sold across the 27-nation bloc from 2035 to be CO2 emission-free, representing the EU’s most significant retreat from its green policy agenda in recent years.
Manfred Weber, head of the European People’s Party in the European Parliament, called the original ban a “serious industrial policy mistake” and confirmed the Commission plans to put forward a proposal to remove it.
The proposal has split the automotive sector. Traditional carmakers such as Volkswagen and Stellantis have lobbied for more flexible targets, citing fierce competition from lower-cost Chinese producers. Meanwhile, the electric vehicle (EV) industry warns that loosening targets could undermine investment and give China an advantage in the global EV market.
“Technology is ready, charging infrastructure is ready, and consumers are ready,” said Michael Lohscheller, CEO of EV maker Polestar. “So what are we waiting for?”
European automakers argue that meeting current EU mandates has been challenging. Sales of EVs lag behind rivals such as Tesla, BYD, and Geely, while high vehicle prices and insufficient charging infrastructure limit consumer uptake. Ford CEO Jim Farley, speaking last week in France, said the market realities in Europe do not match the CO2 targets, announcing a partnership with Renault aimed at reducing EV costs.
The Commission previously offered “breathing space” in March, allowing automakers to meet 2025 targets over three years. Carmakers now seek to continue selling combustion-engine vehicles alongside plug-in hybrids and EVs powered by CO2-neutral fuels, including biofuels derived from agricultural residues or used cooking oil. Commission President Ursula von der Leyen has expressed openness to e-fuels and advanced biofuels as part of a multi-technology approach.
Industry sources say the Commission may also incentivise small EVs through lower taxes and introduce credit schemes to help manufacturers meet CO2 targets. Corporate fleets, which account for about 60% of new car sales in Europe, could also see a push toward greater EV adoption through incentives rather than mandatory targets.
Environmental campaigners oppose any delay, warning that biofuels remain scarce and costly. William Todts, executive director of advocacy group T&E, stressed, “Europe needs to stay the course on electric. It’s clear electric is the future.”
The announcement marks a pivotal moment in Europe’s auto policy, balancing industrial competitiveness with the bloc’s climate ambitions as lawmakers and automakers debate the pace of the transition from combustion engines to electric mobility.
