The European Union on Tuesday is expected to water down its effective ban on sales of new combustion-engine cars from 2035,after lobbying efforts from Germany,Italy,and some automotive industry groups.
Various media outlets have reported on the proposed softening of the policy in recent days,with Manfred Weber,a senior member of the European Parliament(MEP),telling Germany’s Bild newspaper late last week that the ban would be weakened.
Europe’s ban on the sale of new diesel and gasoline cars and vans from 2035 was regarded as a landmark policy in the EU’s flagship green deal when it was adopted in 2023.It aims to eradicate CO2 emissions from cars and vans by that year.
Scaling it back could give greater flexibility to the region’s original equipment manufacturers,which are already dealing with U.S.tariffs,supply chain disruptions,intense competition from China and a bumpy transition to EVs.
Analysts have questioned whether the move will do much to shore up the region’s competitiveness in the long run,while campaigners have criticized another potential rollback on the bloc’s climate ambitions.
A spokesperson for the European Commission,the EU’s executive arm,declined to comment when contacted by CNBC.A press conference is due to take place on Tuesday afternoon.
The policy has been thrust back in the spotlight in recent months,with some auto industry groups calling for a recalibration of the ban to bolster Europe’s industrial competitiveness and protect the strategic resilience of its supply chains,while safeguarding climate goals.
“Flexibility is urgent,”said Sigrid de Vries,director general of the European Automobile Manufacturers’Association(ACEA),a car lobby group.
“2030 is around the corner,and market demand is too low to avoid the risk of multi-billion-euro penalties for manufacturers,”de Vries said Monday in a LinkedIn post,describing the widely expected announcement from the EU as“high noon for the automotive package.”
She added that it would take time to build the necessary charging infrastructure and introduce fiscal and purchase incentives to get the market on track.
ACEA represents 16 major Europe-based automakers,including the likes of Volkswagen
,BMW,Ferrari,and Renault.
‘A risky strategy’
Some automakers that make EVs,however,have pushed for the EU to“stand firm”on its 2035 goal“and back it up with bolder action.”
In an open letter published in mid-September,more than 150 leaders of the region’s electric car industry said the introduction of the target had already triggered hundreds of billions of euros in new investment.
Signatories of the open letter included the likes of EV manufacturers Volvo and Polestar,as well as material suppliers,battery manufacturers and grid operators.
Rico Luman,senior sector economist for transport and logistics at Dutch bank ING,described an expected climbdown of the EU’s 2035 internal combustion engine ban as“a choice for the short run”during a challenging time for the industry.
“Though just pushing back targets would also be a risky strategy in my view,”Luman told CNBC by email.
“It won’t help the European industry in the long run,neither would it save jobs:change is already happening and a supposed competitive advantage of German(and European)manufacturers in combustion engines would be short-lived as it will be more difficult to keep up with Chinese competitors if the industry slows down,”he added.
