Six EU States Seek Revisions to 2035 Internal Combustion Ban
Six European Union member states have urged the European Commission to amend the 2035 regulation prohibiting sales of new internal combustion engine vehicles, proposing exemptions for hybrid powertrains and alternative low-emission technologies. The request, conveyed in a joint letter from the prime ministers of Bulgaria, Czech Republic, Hungary, Italy, Poland, and Slovakia, emphasizes maintaining industrial competitiveness amid sluggish battery electric vehicle adoption and intensifying Chinese market rivalry. This development challenges the March 2023 legislative framework mandating zero tailpipe emissions for all new car registrations by 2035, potentially influencing global supply chains for U.S. automakers reliant on European partnerships.
The letter highlights the need to incorporate synthetic fuels and biofuels into post-2035 compliance strategies, arguing these options could achieve equivalent carbon reductions without mandating full electrification. It arrives as battery electric vehicle sales growth in the EU decelerates to 14.6 percent market share through October 2025, down from projections of 20 percent, per European Automobile Manufacturers’ Association data. The signatories warn that rigid enforcement risks deindustrialization, with the bloc’s automotive sector employing 13.8 million workers and contributing 7 percent to GDP. The prime ministers stated, “We can and we must pursue our climate goal in an effective way, while not killing our competitiveness in the meanwhile since there is nothing green in an industrial desert.”
The European Commission, preparing a revision package for release on December 10, 2025, may incorporate flexibilities such as lifecycle emission accounting for hybrids, which combine internal combustion engines with electric motors for up to 50 percent efficiency gains over pure gasoline models. This could extend to plug-in hybrids certified under Euro 7 standards, limiting CO2 output to 50 grams per kilometer in real-world testing. Industry analysts from S&P Global Mobility estimate such changes might sustain 1.2 million annual hybrid sales in the EU beyond 2035, offsetting a projected 15 percent drop in overall new vehicle volumes if electrification lags. U.S. firms like Ford and General Motors, with joint ventures in Europe producing 800,000 units yearly, could benefit from aligned standards easing export compliance.
Opposition within the EU stems from environmental groups and nations like Germany and France, which advocate stricter timelines to meet net-zero pledges under the Paris Agreement. The Green Deal Industrial Plan, allocating €1 trillion through 2030, prioritizes battery gigafactories aiming for 80 percent domestic production by 2030, but current investments total €102 billion against a €250 billion target. Revisions might delay these by redirecting funds to hybrid R&D, potentially raising EU-wide fleet-average CO2 targets from 93.6 grams per kilometer in 2025 to 95 grams under relaxed scenarios. For American consumers, indirect effects include stabilized prices for imported European hybrids, which captured 4.2 percent of U.S. sales in 2025 per Cox Automotive.
The push reflects broader transatlantic tensions, as the incoming Trump administration signals rollback of U.S. fuel economy mandates to 48.8 miles per gallon by 2031, contrasting the EU’s aggressive decarbonization. BloombergNEF forecasts that hybrid allowances could add €50 billion in annual economic value to the EU auto sector by 2040, bolstering exports to North America where hybrids grew 28 percent year-over-year. As deliberations unfold ahead of the Commission’s announcement, the outcome will test the balance between emission reductions and economic resilience, with potential ripple effects on bilateral trade agreements covering $150 billion in annual automotive exchanges. This initiative underscores the evolving global regulatory landscape for propulsion technologies.
