Brussels has proposed abandoning a 2035 deadline for a complete transition to fully electric vehicles, giving Europe’s traditional carmakers more time to sell hybrid models. Analysts say electric vehicles remain the long-term future, but the new plan reflects efforts to balance industry competitiveness with technological ambition.
The European Commission unveiled the proposal last month, responding to lobbying from the region’s auto sector. The plan would keep plug-in hybrids, range-extended EVs, and conventional engines legal beyond 2035. It also introduces a new category of small electric vehicles eligible for extra credits if produced in Europe, a move industry observers say largely aligns with carmakers’ requests.
Phil Dunne, managing director at consultancy Grant Thornton Stax, described the proposal as an opportunity for European automakers to compete with Chinese rivals. “The Commission has allowed Europe’s car industry to make choices and have a chance to compete,” he said, noting that it could help manufacturers produce cost-competitive electric vehicles.
Premium brands such as Mercedes and BMW will benefit from extra time to sell plug-in hybrids before switching entirely to electric models. Smaller carmakers, including Stellantis and Renault, could gain from incentives for compact EVs, which target urban consumers and city mobility.
The EU’s approach differs significantly from the United States, where support for EVs has been reduced under former President Donald Trump. Last year, Brussels imposed tariffs on Chinese-made electric vehicles, though companies like BYD and Changan continue selling EVs and combustion engine models in Europe, particularly in markets with low EV adoption, such as Poland.
Consultancy AlixPartners predicts fully electric vehicles will account for 62% of European sales by 2035, noting enforcement of the ban could be challenging. Analysts suggest a slower transition could also provide time to expand charging infrastructure, a key barrier to broader EV adoption. EU fully electric car sales grew by 25.7% year-on-year through October, representing 16.4% of total sales, though adoption remains limited in southern and eastern Europe.
Automakers and suppliers face the challenge of adjusting to policy changes after investing tens of billions of euros in electric vehicle development and production capacity since the EU law came into effect in 2023. The relaxed rules may encourage partnerships on affordable EVs, exemplified by the recently announced collaboration between Ford and Renault to develop small electric cars for European markets.
Industry figures urge consistency in EU policy. Ford CEO Jim Farley criticized frequent changes, saying, “We need certainty” for long-term investment planning. Recent adjustments to emissions targets illustrate the uncertainty automakers face, with compliance periods extended and rules repeatedly updated.
