EU officials are moving to relax the 2035 ban on internal-combustion car sales, shifting from a zero-emission target to a 90% reduction in average CO² emissions.
The Proposal
The EU’s executive commission plans to amend 2023 legislation that required new cars to have zero emissions or a 100% cut from 2021 levels. The new rule would still push most vehicles toward battery-only power, but it would allow a limited number of internal-combustion engines.
Automakers would be required to offset the extra emissions by using European steel produced with lower-carbon processes, climate-neutral e-fuels made from renewable electricity and captured CO², and biofuels derived from plants.
EU officials say the change will not hinder the bloc’s goal of climate neutrality by 2050, which means producing only as much CO² as can be absorbed by forests, oceans, or abatement methods such as underground storage.
Flexibility for Plug-In Hybrids
The relaxed limit would keep the door open for plug-in hybrids that combine electric motors with internal-combustion engines, allowing the engine to recharge the battery without a charging station. The proposal also includes measures to boost European battery production and support small electric cars.
The move still requires approval from member governments and the EU parliament and follows appeals from major carmakers and governments in Germany and Italy, which host large manufacturers and are concerned about job impacts.
Industry Concerns
Industry representatives argue that charging infrastructure is not expanding fast enough to convince consumers to switch from gasoline and diesel to electric vehicles. They also point to the cancellation of purchase subsidies in Germany, higher prices for European-made electric cars, competition from inexpensive Chinese models, and a market that remains smaller than before the COVID-19 pandemic.
Sales of battery-only cars in Europe rose 26% for the first 10 months of the year compared with the same period last year, with electric-only cars accounting for 16% of new-car sales.
Confusing Signal, Says Transport & Environment
“This will divert investment away from electrification at a time when European manufacturers urgently need to catch up with Chinese EV-makers,” said the environmental lobby Transport & Environment, describing the easing as “a confusing signal” to automakers and consumers.
Global Context
Both the EU and the U.S. are moving more slowly in adopting electric cars than China, where battery vehicles made up 34% of the market in the third quarter, driven by state assistance and fierce competition among affordable Chinese automakers.
Earlier this month, President Donald Trump announced a plan to significantly reduce fuel-economy requirements in the U.S. The proposed standards, if finalized in 2026, would set the industry fleet-wide average for light-duty vehicles at 34.5 miles per gallon in the 2031 model year. Former President Joe Biden had previously set much stricter rules, requiring about 50.4 miles per gallon.
The Trump rule change was welcomed by industry, aligning with the president’s oil and gas-friendly agenda and other measures that prolong sales of internal-combustion vehicles, such as relaxing tailpipe emissions rules, repealing fines for non-compliance, and eliminating EV incentives.
The state of California had also proposed a ban on sales of new internal-combustion cars from 2035 but was blocked by Congress.
Key Takeaways
- EU proposes a 90% emissions reduction instead of zero for new cars by 2035.
- Plug-in hybrids and some internal-combustion models would remain allowed.
- Industry warns that the change could divert investment from electrification.
The proposal highlights the tension between regulatory ambition and industry readiness as Europe navigates its transition to cleaner mobility.
