EU Considers 5-Year Extension to 2035 Combustion Engine Ban

The European Union is preparing to delay or weaken its landmark 2035 combustion engine ban after automakers warned of billion-dollar fines and mass layoffs.

Why it matters: The move signals Europe is prioritizing short-term industry relief over long-term EV competitiveness against China.

The Details

• Loopholes under discussion could extend the ban by five years to 2040 or remove it entirely, according to documents seen by Bloomberg.
• The announcement may come as early as Tuesday, December 16, in Strasbourg.
• Stellantis, Mercedes-Benz, and German automakers lobbied heavily after facing potential fines exceeding €1 billion ($1.2 billion).
• The EU will also propose a 10-year exemption from safety and emissions rules for small EVs made in Europe, plus reserved parking and subsidies.
• German Chancellor Friedrich Merz stated: “We need to correct the conditions in Europe as quickly as possible so that this industry has a future.”

By The Numbers

• Original ban date: 2035
• Potential new deadline: 2040 (5-year extension)
• Potential industry fines: €1 billion+ ($1.2 billion)
• European auto sector value: €1 trillion ($1.2 trillion)
• Small EV regulatory relief: 10 years
• Carbon price delay: Pushed to 2028

EVXL’s Take

This confirms exactly what we warned about last week: European automakers are treating the symptom, not the disease. The real crisis is not regulatory pressure. It is competitive collapse. While Brussels debates loosening rules, BYD is doubling its European dealer network to 2,000 locations by 2026 and building tariff-proof factories in Hungary and Turkey.

Softening the 2035 target will not solve the development speed gap where Chinese competitors launch new models in 18 months versus Volkswagen’s five years. As we documented when the EU first signaled this retreat, it simply gives European automakers permission to stick with profitable hybrids while Chinese brands capture market share. The delay is not a rescue plan. It is managed decline.

Frequently Asked Questions

• When will the EU announce its decision? The European Commission is expected to unveil details on Tuesday, December 16, 2025, in Strasbourg.
• Can I still buy a petrol car after 2035? Under the proposed changes, plug-in hybrids with extended electric range and potentially pure combustion vehicles would remain available beyond 2035.
• Which automakers support weakening the ban? Stellantis, Mercedes-Benz, BMW, Volkswagen, and the European Automobile Manufacturers’ Association support the rollback. Volvo and Polestar oppose it.