Europe shifts into reverse on EU 2035 ICE ban

The watering down of the EU 2035 ICE ban elicited a predictably wide array of responses from stakeholders. Responses to the Europe ICE ban reflect how automakers, environmental groups and industry associations view the new balance between flexibility and emissions targets.

OEM response: 

The response from the European Automobile Manufacturers’ Association (ACEA) was broadly positive, with Director General Sigrid de Vries stating, “Today’s proposals rightly recognise the need for more flexibility and technology neutrality to make the green transition a success. This constitutes a major change compared to the current law. However, the devil can be very much in the detail. We will now study the package, and work with co-legislators to critically strengthen the proposals where needed.” 

Environmental group response:

However, environmental lobbying group Transport and Environment (T&E) was unsurprisingly less enthusiastic about the EU 2035 ICE ban changes. In its statement, T&E said, “Reversing the EU’s 2035 phase-out of combustion engine sales sends a confusing signal to the European car industry and consumers. Carmakers could continue selling cars with engines, the European Commission proposed today, despite the EU’s aim to have the last polluting cars off its roads by 2050. This will divert investment away from electrification at a time when European manufacturers urgently need to catch up with Chinese EV-makers.”

Industry association response:  

However, the strongest response to the EU 2035 ICE ban reversal came from the German automotive industry association, the VDA. According to the association’s President Hildegard Müller, the lifting of the EU 2035 ICE ban did not go far enough to aid the industry at a time of crisis.

She said, "The EU had promised to examine and analyze the realities and, based on that analysis, implement flexibilities and adjustments. This has not happened—Brussels has disappointed with its proposed draft. In times of increasing international competition, in times when European economic strength is crucial, this entire package from Brussels is disastrous. Given the realities of the European passenger car market and the economic situation of the automotive industry (manufacturers and suppliers) in Europe, it is incomprehensible how the Commission can act in this way at this time."

Müller also criticized proposed requirements tied to green steel and renewable fuels, arguing that their availability remains outside of automakers’ control. She said the approach risks leaving the industry dependent on external developments, echoing earlier concerns around the rollout of charging infrastructure.  

It is difficult to disagree with Müller’s assessment of the EU 2035 ICE ban revisions. The European automotive industry is facing a perfect storm of attempting to meet emissions legislation that simply does not reflect the realities of the market, managing spiraling R&D costs for new BEVs and SDVs and contending with intensifying competition from China, which puts additional pressure on European car exporters. 

It is possible that, in attempting to please everyone with these revisions to the EU 2035 ICE ban emissions targets, the Commission has ended up pleasing no one. At the same time, it has not addressed the harsh economic realities facing European OEMs and European car exporters, including record diminishing profits and increased plant closures, such as Audi’s Brussels facility near the EU’s administrative headquarters and Ford’s factory in Saarlouis, Germany.    

Although the EU’s revised 2035 ban on gas cars provides additional flexibility, it still underscores the challenges facing European automakers—from compliance costs to EV investment pressures to ongoing market strain.