The European Union has reversed course on its planned 2035 ban of new internal combustion engine (ICE) vehicle sales, sparking a rift among automakers. The decision, announced this week, allows conventional cars to remain on the market beyond the previously set deadline, a move welcomed by some manufacturers but fiercely opposed by others.
Shifting Strategies and Conflicting Visions
Initially, companies like Volvo pledged full electrification by the end of the decade. However, the Swedish automaker later walked back its commitment, retaining plug-in hybrids beyond 2030. Despite this shift, Volvo remains a staunch advocate for the original EU ban, arguing that delaying the transition “risks undermining Europe’s competitiveness.” They assert that other automakers could fully electrify by 2035, pointing to their own rapid EV portfolio development as proof.
Kia shares this viewpoint. Their European CEO, Marc Hedrich, warns that halting EV development due to the ban reversal would be costly. The company has a full lineup of electric models coming and would be set back by policy changes.
Pragmatism vs. Long-Term Goals
However, the majority of automakers appear to support the EU’s revised stance. Volkswagen called the proposal “pragmatic” and “economically sound,” while Renault praised the new “Small Affordable Cars” initiative. This initiative creates a new vehicle subcategory (M1E) up to 4.2 meters long, easing regulatory constraints to lower EV production costs and offering automakers “super credits” towards emissions targets.
BMW has mixed feelings, supporting the extension of ICE vehicles but criticizing increasingly strict CO2 regulations as merely a “superficial fix.” Stellantis and Mercedes-Benz have actively lobbied against the ban, with Mercedes CEO Ola Källenius warning the EU Commission that the 2035 target was unrealistic. The European Automobile Manufacturers’ Association (ACEA) described the decision as a “first step to creating a more pragmatic and flexible pathway.”
The Hybrid Debate and Toyota’s Challenge
Toyota has been the most vocal opponent of the ban, with Chairman Akio Toyoda arguing that EVs will never dominate the market. He claims EVs produce as much carbon as three hybrids when accounting for battery and vehicle production emissions—a controversial assertion.
The New Reality: No Final Deadline
Under the revised rules, car companies in the EU must cut CO2 emissions by 90% compared to 2021 levels, but ICE vehicles, hybrids, and synthetic fuel options will remain available past 2035. The remaining 10% of emissions will be offset by biofuels, synthetic fuels, and low-carbon steel produced in the EU.
Ultimately, the EU has effectively removed any end date for combustion engines, allowing automakers flexibility while still pushing towards decarbonization. This move acknowledges the economic realities and technological limitations of a full EV transition, but also risks slowing down the shift towards fully electric mobility.
