EU Auto Industry Pushes Back Against 2035 Combustion Engine Ban
Europe’s powerhouse political group, the European People’s Party (EPP), is calling for a reevaluation of the EU’s ambitious plan to ban the sale of new gas-powered cars by 2035.
In a move reflecting growing anxiety within the auto industry, the EPP, which includes European Commission President Ursula von der Leyen, argues that the ban, aimed at curbing carbon emissions, is putting undue pressure on car manufacturers. The group’s position paper, set to be finalized in December, proposes allowing the continued sale of gasoline-powered cars that run on biofuels and other low-emission alternatives.
“The 2035 ban on the sale of new cars with combustion engines ‘should be reversed’,” the paper states, highlighting the economic strain imposed by the stricter emissions regulations.
The EPP is also urging a reconsideration of hefty fines for carmakers exceeding new emissions limits scheduled to take effect next year. These fines, intended to incentivize electric vehicle (EV) production, are now viewed as counterproductive in light of slowing EV sales across Europe.
“Given the slump in EV sales in Europe, this measure was now counterproductive,” the EPP argues, calling for a move-up of the planned review of the 2035 law to 2025. This, they say, would give the industry "legal certainty and planning security as soon as possible."
Von der Leyen, however, remains steadfast in her commitment to the 2035 ban, enacted during her first term as part of a sweeping package designed to achieve net-zero carbon emissions in the EU by 2050.
Despite her stance, she has acknowledged the industry’s struggles and pledged to facilitate "designing solutions together" through discussions with stakeholders.
Volkswagen and Ford’s recent announcements of tens of thousands of job cuts reflect the industry’s mounting concerns.
Adding fuel to the fire, all major EU-based car manufacturers, except for Renault, have issued profit warnings, grappling with the dual pressures of intense competition from Chinese-made EVs and a costly transition to electric production amidst weakening European EV demand.
The European car industry body, Acea, has called for "urgent relief measures" before the stricter 2025 emissions targets come into effect.
The EPP leader, Manfred Weber, a German politician, has been meeting with industry leaders, recognizing the urgency of the situation.
His recent alliance with diverse political groups, including Italian Prime Minister Giorgia Meloni’s Brothers of Italy, which have expressed skepticism about the EU’s climate goals, signals a growing political pushback against the aggressive timeline.
Meloni has critiqued the 2035 ban as “self-destructive.” German Chancellor Olaf Scholz, a Socialist, has also echoed the call to scrap the proposed fines.
Adding to the chorus of dissent, industry ministers from seven EU countries, led by Italy and the Czech Republic, have joined the EPP in demanding an early review of the 2035 ban and greater allowances for renewable fuels.
This debate raises critical questions about the balance between environmental goals and economic stability, with significant implications not only for Europe but also for the global auto industry.
The EU’s biggest political group is pushing for a reversal of an upcoming ban on combustion engines to stop the “unprecedented pressure” facing Europe’s auto industry.
The conservative European People’s party, in a position paper seen by the Financial Times, said the 2035 ban on the sale of new cars with combustion engines “should be reversed”. Traditional engines should continue to be allowed if they run on biofuels and other low-emission alternatives, it said.
The group that counts among its members European Commission president Ursula von der Leyen also said that fines for carmakers for exceeding new emissions limits, which are due to come in from next year, should be reconsidered.
The multibillion-euro fines were designed to provide an incentive for the production of electric vehicles, but given the slump in EV sales in Europe, this measure was now counterproductive, the EPP argued.
The group is pushing for a planned review of the 2035 law to be brought forward a year to 2025 in order to “correct” the ban and “provide the sector with legal certainty and planning security as soon as possible”.
The position paper could change slightly before it is adopted by the group in December.
Von der Leyen has maintained that Brussels will uphold the ban, which was enacted during her first term as part of a package of laws aimed at cutting carbon emissions in the EU to net zero by 2050.
This week, however, she announced that she would personally chair talks with stakeholders across the industry “to design solutions together as this industry goes through a deep and disruptive transition”.
Manfred Weber, the EPP leader and a German politician, met car chiefs this month amid growing concern about the state of the industry following Volkswagen and Ford announcing tens of thousands of job cuts.
All major EU-based carmakers have issued profit warnings, except for Renault, as they struggle to compete with cheap Chinese electric vehicles at the same time as transitioning their own production lines to EVs amid weakening European demand.
Acea, the car industry body, has called for “urgent relief measures” before the new emissions targets come into force in 2025.
Following European parliament elections in June, Weber has teamed up with groups across the political spectrum, including Italian Prime Minister Giorgia Meloni’s Brothers of Italy, which have questioned the bloc’s climate goals. Meloni has called the 2035 ban a “self-destructive” policy.
German Chancellor Olaf Scholz, a Socialist, has also demanded fines be scrapped.
Industry ministers of seven EU countries led by Italy and the Czech Republic on Thursday echoed the EPP’s paper in calling for an earlier review of the 2035 ban and greater allowances for renewable fuels. They also requested better incentive schemes for consumers to buy electric vehicles.
