Europe’s automotive sector, under mounting pressure, is looking for flexibility in the policy package that the European Commission will unveil next month — a proposal that could influence the planned 2035 ban on sales of new combustion-engine cars. According to Reuters, manufacturers hope Brussels will reconsider the strict trajectory toward full electrification, given slower-than-expected market adoption and growing competition from China.
At the start of the decade, companies like Volkswagen and Renault set ambitious targets based on rapid EV uptake. Market reality, however, has proved more cautious: consumer demand has fallen short of expectations, while high energy costs, U.S. export tariffs and intensifying Asian competition create additional challenges.
Automakers call for revisiting the 2035 target
German carmakers and the European Automobile Manufacturers’ Association (ACEA) are requesting more flexibility beyond battery-electric and hydrogen vehicles. Stellantis has warned of a potential “irreversible decline” without stronger support.
The regulation adopted in March 2023 mandates that all new vehicles sold in the EU from 2035 must produce zero exhaust emissions. The industry is now pushing for concessions: acceptance of CO₂-neutral fuels such as biofuels and e-fuels, continued development of internal-combustion engines adapted to such fuels, and extended use of plug-in hybrids and range-extender systems.
Volkswagen and other manufacturers argue that rigid targets no longer reflect market reality and insist that consumer demand — not regulation — should dictate the pace. They are calling for more incentives to stimulate EV purchases.
EV demand grows, but more slowly than forecast
ACEA data shows battery-electric vehicles reached a 16% market share in the first ten months of the year, up from 13% a year earlier. However, major structural obstacles remain: consumer anxiety over charging infrastructure, especially in Central and Eastern Europe, high electricity prices in Germany and uneven development of fast-charging networks across the EU.
The policy package expected next month will indicate whether the EU intends to stay firmly committed to the 2035 combustion-engine phaseout or whether it will open the door to compromises that could extend the role of internal combustion in Europe’s automotive landscape.
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