In recent years, amid the strong overseas expansion of China’s electric vehicles, the EU, unwilling to fall behind, intends to repeal the “2035 ban on internal combustion engine vehicles”.
According to Reuters, on December 12 local time, Manfred Weber, Chairman of the European People’s Party (EPP), the largest political group in the European Parliament, stated that the European Commission will cancel the original plan to completely phase out internal combustion engine vehicles by 2035.
Reports indicate that this decision is a major victory for Germany, which has been committed to protecting its automakers. Germany and Italy have been actively lobbying to overturn the ban, fearing that their domestic car companies will lose out to competitors during the transition to new energy vehicles. However, Spain opposes the scrapping of the ban, pointing out that the move will undermine the EU’s efforts to transform its automotive industry and may lead to job losses and factory closures.
Will the EU Abolish the Internal Combustion Engine Ban?
At a press conference held in Heidelberg, Germany, Weber said: “Next Tuesday (the 16th), the European Commission will put forward a clear proposal to abolish the internal combustion engine ban.” He also noted that it should be up to the market and consumers to decide how to achieve climate goals.
The European Commission is scheduled to issue a statement on the plan on December 16 but has said it will not comment on any proposal in advance.
Weber did not provide further details, but in an interview with Germany’s Bild on the evening of the 11th, he stated that an alternative plan will be proposed, mandating a 90% reduction in carbon dioxide emissions for newly registered vehicles starting in 2035, instead of the original goal of complete zero emissions.
Weber also revealed: “There will be no 100% (carbon emission reduction) target even from 2040 onwards.”
On the same day, the European STOXX 600 Automobiles & Parts Index rose by 0.8%, and the stock prices of traditional internal combustion engine vehicle manufacturers such as Renault, Porsche, Stellantis, and Volkswagen increased by 1.3% to 3%.
Reports suggest that this aligns with the demands of Mercedes-Benz and BMW but conflicts with the interests of companies like Sweden’s Volvo Cars.
Volvo has invested heavily in its electrification transformation and views any reversal of the ban as a betrayal. Eric Severinson, the company’s Chief Commercial Officer, said on the 12th that any policy reversal would weaken confidence in future regulations, and the company is “ready” to launch electric alternatives.
The UK’s The Guardian also mentioned that news of the EU’s plan to lift the ban has angered environmentalists.
Colin Walker, Head of Transport at the European Energy and Climate Intelligence Unit, stated that if the news is true, it will “keep millions of European households driving more polluting and expensive petrol cars”. He added that continuing to use hybrid vehicles will only delay the shift to electric vehicles.
Germany’s “Victory” and Spain’s Opposition
At the same time, there are significant divisions within the EU regarding this policy reversal.
Reuters noted that Germany and Italy have been actively lobbying to overturn the ban, fearing that their domestic car companies will lose out to competitors, especially Chinese automakers, during the transition to new energy vehicles. However, Spain holds an opposing view. The country has already entered the phase of automotive transformation, with electric vehicle and battery manufacturers having invested in building factories there.
German Chancellor Olaf Scholz said on the 12th that electric vehicles remain the main path to achieving carbon neutrality, but other technologies should also be adopted. He stated: “This is what we call technological openness. It now provides real planning security for the industry.”
He admitted that he “supports” the scrapping of the ban, adding that “the reality is that by 2035, 2040, and 2050, there will still be millions of fuel-powered vehicles worldwide”.
Last month, Scholz wrote to European Commission President Ursula von der Leyen, stating that demand for electric vehicles has not met industry expectations and that automakers need more flexibility. He wrote: “A large part of the European automotive industry, including Germany, especially the supplier industry, is in an extremely difficult economic situation, so we must revise Europe’s framework conditions as soon as possible to ensure the industry’s future in Europe.”
But Spanish Prime Minister Pedro Sánchez has urged the European Commission not to weaken the ban on internal combustion engine vehicles.
Reuters reported that in a letter to von der Leyen on the 11th, Sánchez said that weakening the policy would undermine the EU’s efforts to transform its automotive industry into a powerhouse of electric vehicle manufacturing, risking job losses and factory closures. The letter stated: “Any further relaxation (of the policy) could lead to significant delays in modernization investments, which is linked to the temporary slowdown in demand for electric vehicles.”
The letter also said: “Therefore, we oppose the continued sale of internal combustion engine vehicles or other unproven technologies after 2035.”
In the letter, Sánchez also called for the introduction of a “green steel label” to reward automakers for using low-carbon materials and to mandate that vehicles contain a minimum proportion of EU-manufactured content.
Facing Competitive Pressure, the EU Cannot Afford to Lose…
In March 2023, the EU decided to ban the sale of new fuel-powered passenger cars and light commercial vehicles that produce carbon emissions from 2035. At Germany’s request, new fuel-powered vehicles using carbon-neutral fuels are expected to continue to be sold after 2035. The EU stated that under this regulation, carbon emissions from new fuel-powered passenger cars and light commercial vehicles will be reduced to zero by 2035.
Reuters pointed out that the ban is a core part of the EU’s strategy to promote decarbonization and the development of electric vehicles. However, the EU is facing intense lobbying, particularly from Germany and its automakers, who complain that they cannot withstand the fierce competition from Chinese car companies.
In fact, “anxiety” is a common sentiment among the European Commission and leaders of member states. Seeing that their established automakers may fail to keep up with the times and fall behind China and the United States, the EU has long wanted to waver on the principles of “environmental protection” and “free trade”.
On November 7 local time, Thierry Breton, European Commission Executive Vice-President in charge of industrial strategy, told Italy’s La Stampa in an interview that with fierce competition from Chinese and American rivals, the EU needs to take action to support its domestic automotive industry, including re-evaluating the EU’s zero-emission targets and “setting conditions” for Chinese investment, targeting Chinese automakers’ production bases in Spain and Hungary.
When talking about the internal combustion engine vehicle ban, Breton even said: “We must show flexibility on this goal.”
As one of China’s “new three key export categories”, new energy vehicles have maintained strong momentum in “going global” this year. According to CCTV News, in the first four months of this year, China’s automobile production and sales exceeded 10 million units for the first time, among which exports of new energy vehicles exceeded 640,000 units.
At the end of July, the latest analysis released by industry research institute JATO Dynamics showed that in the first half of this year, Chinese brands accounted for 5.1% of new car registrations in 28 European countries (including the UK), a record high and nearly double that of last year.
“European leaders can complain all they want about Chinese electric vehicles flooding the continent, but their resistance may be in vain,” a media outlet pointed out in August. This summer, an increasing number of transporters have appeared on German highways, delivering vehicles from BYD, Leapmotor, and Great Wall Motors from ports to dealers. In Sweden and the UK, cars from XPeng and Polestar have also become increasingly common on the roads.
