European Automakers Push For 2035 Combustion Engine Ban Reprieve As EV Transition Stalls

Europe’s embattled carmakers are hoping for regulatory relief when Brussels unveils an auto sector package on December 10, which could water down an effective ban on new combustion engines initially slated for 2035.

The continent’s automakers from Volkswagen to Renault had high hopes for the electric vehicle shift when they set ambitious targets at the beginning of the decade. Those efforts have since collided with the reality of lower-than-expected demand and fierce competition from China, according to a Reuters report.

What Is Expected On December 10?

Brussels is set to unveil measures designed to support the regional auto industry, one of the EU’s most important sectors, in the face of high energy costs, tariffs on exports to the U.S., and Asian rivals eating into the bloc’s market.

German automakers and the European Automobile Manufacturers’ Association have called for a weakening of rules designed to boost battery or fuel-cell electric drive cars. Fiat-to-Maserati owner Stellantis warned the industry risks an “irreversible decline” without help.

The industry is now pushing for concessions. It hopes the European Commission will accept that CO2-neutral fuels, such as biofuels, could continue to power internal combustion engines, as well as plug-in hybrids or range extenders.

Automakers including Europe’s biggest Volkswagen have argued that immovable targets no longer make sense, and that the market, rather than legislators, should decide when combustion engines are fully phased out. They favor instead incentives to boost demand for electric vehicles.

Batteries Versus Engines: The Data Problem

European sales of purely battery-electric vehicles have gained in recent years, but not enough to compensate for a decline in combustion engine cars.

According to data from ACEA, BEV market share reached 16% in the first 10 months of 2025, up from 13% a year previously. While that sounds like progress, most major automakers are struggling to keep pace with even that modest average:

• Volkswagen: ~10% BEV share
• Porsche: ~10% BEV share
• Mercedes-Benz: ~12% BEV share
• Stellantis: 11.1% BEV share (nine-month data for Europe)
• BMW: ~18% BEV share
• Volvo Cars: ~21% BEV share

Only BMW and Volvo are notably above the EU average—and Volvo’s figure includes a mix of both fully electric and plug-in hybrid models.

How It Started Vs. How It’s Going

The gap between initial ambitions and current reality tells the story of Europe’s EV retreat:

Volkswagen Group

• Initial 2030 Ambition: Six battery factories in Europe alone by 2030, 240 gigawatt hours of capacity; at least 70% of deliveries in Europe expected to be fully electric by 2030
• Current Ambition: Plans three battery cell factories in Europe and North America, with maximum capacity of 200 GWh; no firm forecast or EV sales target

Porsche

• Initial 2030 Ambition: More than 80% of deliveries to be fully electric by 2030
• Current Ambition: No specific EV sales target

BMW

• Initial 2030 Ambition: Targets 50% of global sales to be fully electric by 2030; interim goal of 25% BEV share by 2025
• Current Ambition: Remains committed to 50% target, dependent on market conditions; 2025 BEV share at the 2024 level (17.4%)

Mercedes-Benz Group

• Initial 2030 Ambition: 100% EV sales by 2030 where market conditions allow; interim target of 50% electrified (mostly EV) by 2025
• Current Ambition: Expects at least 50% electrified (including hybrids) by 2030; will keep combustion engines well into the 2030s

Renault Group

• Initial 2030 Ambition: 100% electric as early as 2030
• Current Ambition: Targets 100% BEV share in 2035

Stellantis

• Initial 2030 Ambition: Global BEV sales of five million units in 2030, reaching 100% of passenger car sales in Europe and 50% passenger cars and light-duty trucks in the United States
• Current Ambition: Expected to review goals in Q2 2026 as part of new business plan; group no longer pursues goal of producing only electric vehicles in Europe by 2030, former head of Europe said in September

Volvo Cars

• Initial 2030 Ambition: To sell purely battery-powered vehicles from 2030 onwards
• Current Ambition: Aims for 90-100% of its global sales volume by 2030 to consist of electrified cars, meaning mix of both fully electric and plug-in hybrid models

Where Did It All Go Wrong?

Demand is rising for EVs in Europe, but not at the pace carmakers had once planned for. ACEA data shows a market share of 16% for battery electric vehicles in the first 10 months of the year, up from 13% a year previously.

Charging anxiety remains an issue for consumers, with central and eastern Europe behind on infrastructure, while high electricity costs are a concern in Germany.

The regulation that all new vehicles from 2035 should have zero emissions was adopted in March 2023 when the outlook for battery electric vehicles was brighter.

The Political Divide

The debate over the 2035 target has split EU member states. France and Spain are calling on the European Union to stick with its plans, putting them at odds with German Chancellor Friedrich Merz, who has called on the bloc to give up its 2035 deadline to help Germany’s troubled car industry.

BMW CEO Oliver Zipse recently expressed optimism that the EU will eventually realize how massively this move would impact the European car industry, pointing out that nearly 50,000 job losses this year alone in Germany “could somehow be related to regulation.”

Meanwhile, environmental organizations have strongly urged the EU to stand firm, warning that weakening the 2035 ban would put at risk up to one million jobs in the green economy.

EVXL’s Take

European automakers are lobbying for a reprieve on the 2035 ban, but they’re treating the symptom rather than the disease. As we’ve documented throughout 2025, the real crisis isn’t regulatory pressure—it’s competitive collapse.

When BMW’s CEO called e-mobility as the sole technology “a dead end” back in May, he was defending BMW’s “technology openness” strategy. That approach looked prescient when Mercedes suspended EQE and EQS production and Volvo tempered their EV forecasts. But now even BMW is hoping Brussels bails out the industry.

The uncomfortable truth: while European executives petition for regulatory relief, BYD is doubling its European dealer network to 2,000 locations by 2026 and building factories in Hungary and Turkey that will make tariffs irrelevant. VW just opened a €2.9 billion test center in China because its German software division burned €12 billion failing to compete.

Softening the 2035 target won’t solve a development speed disadvantage where Chinese competitors launch new models in 18 months versus VW’s five years. It just gives European automakers permission to retreat to profitable hybrids while Chinese brands capture over 5% market share and growing.

The December 10 announcement may include a new affordable EV regulatory category that would allow small EVs to skip some safety equipment requirements—that’s actually a constructive step toward €15,000-€20,000 EVs. But weakening the 2035 deadline? That’s not a rescue plan. It’s a managed decline.

Consider the pattern: Volkswagen posted a €1.3 billion loss as Porsche’s EV strategy collapsed. VW’s EV strategy has been faltering since at least September 2024 when factory closures in Germany first became a real possibility. We warned back in October 2024 that BMW’s CEO saw this coming—but instead of accelerating innovation, the industry chose to lobby for weaker targets.

Meanwhile, BYD overtook Tesla in European EV sales in April 2025 and hasn’t looked back. The Chinese giant’s Dolphin Surf starts at €22,990, roughly €20,000 cheaper than comparable European offerings. That’s the competition European automakers face, and no regulatory rollback will change it.

The real question isn’t whether Europe keeps or weakens its 2035 target. It’s whether European automakers can survive long enough for it to matter.