EU waters down plan to end new petrol and diesel car sales by 2035

The European Commission has watered down its plan to end sales of new petrol and diesel cars by 2035, proposing that 90% of new cars from that year be zero-emission rather than 100%. The draft reflects persistent lobbying from carmakers, particularly in Germany, who argued that demand for electric vehicles is not yet sufficient to justify a blanket ban and that flexibility is needed to avoid penalizing industry.

Under the draft proposal, the remaining 10% of new cars could be conventional petrol or diesel models or hybrids. The plan would also require manufacturers to use low-carbon steel produced in the EU and would encourage greater use of biofuels and so-called e-fuels, synthesized from captured carbon dioxide, to offset the higher emissions associated with gasoline and diesel vehicles in the meantime. Opponents warn the change could slow the transition to electric vehicles and leave the bloc exposed to foreign competition.

The green transport group Transport & Environment warned that the UK should not follow the EU’s lead by weakening its own plans to phase out conventional cars under the Zero Emission Vehicles mandate. "The UK must stand firm. Our ZEV mandate is already driving jobs, investment and innovation into the UK. As major exporters we cannot compete unless we innovate, and global markets are going electric fast," said Anna Krajinska, T&E UK’s director.

Ahead of the announcement, Sigrid de Vries, director-general at ACEA, said that "flexibility" for manufacturers was "urgent". "2030 is around the corner, and market demand is too low to avoid the risk of multi-billion-euro penalties for manufacturers. It will take time to build the charging points and introduce fiscal and purchase incentives to get the market on track. Policy makers must provide breathing space to manufacturers to sustain jobs, innovation and investments," she said.

Industry responses were mixed. Volvo argued that the company had already built a complete EV portfolio in less than a decade and was prepared to go fully electric, using hybrids as a transition. It warned that weakening long-term commitments for short-term gains could undermine Europe’s competitiveness for years to come. "A consistent and ambitious policy framework, as well as investments in public infrastructure, is what will deliver real benefits for customers, for the climate, and for Europe’s industrial strength," Volvo said.

Volkswagen welcomed the Commission’s draft proposal on new CO2 targets, calling it "economically sound overall." It noted that small electric vehicles will receive special support and that flexibility around CO2 targets for 2030 should be extended to both passenger cars and light commercial vehicles. The group framed the move as pragmatic and aligned with market conditions.

Colin Walker, head of transport at the Energy and Climate Intelligence Unit (ECIU), said a stable UK policy would give companies the confidence to invest in charging infrastructure and avoid jeopardising investments. He cited Sunderland’s history as a hub for EV manufacturing, noting that government policy helped attract Nissan’s Leaf plant and that today the latest Nissan electric vehicle remains a mainstay of the North East’s production base.

Fiona Howarth, chief executive of Octopus Electric Vehicles, warned that any pullback in the UK’s goals due to shifts in Brussels would send a damaging signal to investors, manufacturers and supply-chain partners who have already tilted resources toward electrification in anticipation of a consistent policy framework.

The Commission’s plan comes as governments push for greener transport while trying to manage the cost and practicality of a rapid shift to electrification. The draft would also require scaling up charging infrastructure and aligning incentives to support a EV transition at scale, but it leaves room for a gradual path toward decarbonization rather than an abrupt end to internal combustion engine sales.

The proposed changes come as the UK has already signaled an ambitious timetable, aiming to end sales of new petrol and diesel cars by 2030, a stance that some industry groups say could be jeopardized if EU rules loosen. Proponents of a more flexible EU approach argue that a staged transition, with higher shares of zero-emission vehicles over time, could help preserve industrial jobs while still accelerating decarbonization. Critics, however, worry that any delay risks locking in higher emissions and prolonging reliance on fossil fuels outside Europe, potentially widening the gap with faster-moving global markets.

The plan remains in draft form and will be negotiated among EU member states and the European Parliament. If approved in its current spirit, it would mark a shift from a hard deadline to a more flexible, market-driven trajectory, balancing climate goals with industry viability. As policymakers weigh the trade-offs, industry leaders stress the importance of clear, stable policy and robust infrastructure investments to sustain momentum toward a cleaner, more competitive European automotive sector.

In the broader context of climate and environment policy, the debate highlights competing priorities: accelerating the transition to zero-emission mobility while safeguarding jobs, investment, and European industrial strength. The outcome will influence how automakers allocate capital, how charging networks expand, and how consumers experience the shift to electric vehicles across the continent.