The European Commission has eased its plan to phase out new petrol and diesel cars by 2035, following lobbying from carmakers concerned about slow consumer adoption of electric vehicles.
Under current rules, all new cars sold in the EU from 2035 were required to be zero-emission. The Commission’s revised proposal would require only 90 per cent of new vehicles to meet this standard, leaving 10 per cent of sales open to conventional petrol or diesel cars and hybrids. Additional measures, such as greater use of biofuels and synthetic e-fuels, are expected to offset emissions from these vehicles.
The European Automobile Manufacturers’ Association (ACEA), representing major manufacturers including German carmakers, has repeatedly warned that electric vehicle demand is not rising quickly enough to meet existing targets. Without flexibility, ACEA said, companies could face “multi-billion-euro” penalties.
“2030 is around the corner, and market demand is too low to avoid the risk of multi-million-euro penalties for manufacturers,” said Sigrid de Vries, ACEA’s director general. She highlighted the need for expanded charging infrastructure and fiscal incentives to encourage electric vehicle uptake.
The Commission also plans to require carmakers to increase the use of low-carbon steel produced in the EU, supporting the broader decarbonisation of the automotive supply chain.
Critics warn the move could slow Europe’s transition to electric vehicles and weaken its industrial competitiveness compared with China and the United States. Environmental group Transport & Environment urged the UK not to follow the EU’s lead.
“The UK must stand firm,” said Anna Krajinska, T&E UK’s director. “Our zero-emission vehicle mandate is driving jobs, investment and innovation. Global markets are moving electric quickly, and retreating now risks losing out.”
Responses from carmakers have been mixed. Volkswagen welcomed the Commission’s draft, calling it “economically sound” and pragmatic given current market conditions. By contrast, Volvo said weakening long-term targets could harm Europe’s industrial future. The Swedish carmaker pointed to its own transition to a fully electric vehicle portfolio and argued that consistency in policy was key to maintaining competitiveness.
UK industry voices have similarly stressed the importance of policy stability. Colin Walker, head of transport at the Energy and Climate Intelligence Unit, noted that government decisions have previously influenced investment decisions, citing Sunderland’s Nissan plant as an example. Fiona Howarth, CEO of Octopus Electric Vehicles, warned that any UK alignment with the EU’s softened targets could undermine investor confidence.
As governments worldwide push for greener transport to meet climate goals, the EU’s revised rules highlight the tension between ambitious environmental targets and the practical realities facing the automotive industry. Questions remain about how quickly Europe can realistically phase out petrol and diesel vehicles while maintaining industrial competitiveness.
