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EU 2035 ICE Ban Under Threat: What a Postponement Means for the Auto Industry

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  Published in Automotive and Transportation on Thursday, December 4th 2025 at 8:16 GMT by dw

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EU’s 2035 Combustion‑Engine Ban: Why Undoing It is Spooking the Auto Industry

The European Union’s long‑standing pledge to ban the sale of new internal‑combustion‑engine (ICE) cars by 2035 is the cornerstone of the bloc’s strategy to achieve climate‑neutrality by 2050. The policy, which was first announced in 2019 and incorporated into the EU’s “Climate Law” in 2021, was widely praised by environmentalists, but has recently come under renewed scrutiny by a coalition of automakers, industry lobbyists, and some member‑state governments. A new round of political bargaining and market‑realism concerns has given the impression that the 2035 deadline may be postponed—an outcome that has sparked unease across the European auto sector.

1. The Rationale Behind the 2035 Ban

The EU’s decision to eliminate ICE vehicles from the marketplace after 2035 is rooted in a series of interlocking goals:

These objectives were codified in the “Clean Vehicles” directive and later embedded in the “European Climate Law” (2021), which enshrined the 2035 ICE ban as a legally binding requirement for all member states. The directive also mandated that 100 % of new car sales be zero‑emission by 2040, with a transitional period in which hybrids were allowed.

2. How the Auto Industry Has Responded

When the 2035 deadline was first introduced, European manufacturers—including Volkswagen Group, BMW, Mercedes‑Benz, and Stellantis—were quick to sign up, announcing ambitious EV roadmaps. They projected that they would phase out ICE vehicles over the next two decades, with the industry as a whole converting 40 % of its production capacity to EV platforms by 2030.

Yet, a deeper dive into industry statements reveals a persistent undercurrent of caution:

1. Technological Readiness
   - Battery costs are still too high for many consumers.
   - Range anxiety and charging infrastructure remain problematic in rural areas.
   - Some manufacturers, especially those that rely heavily on high‑performance ICE models (e.g., AMG, Ferrari), have expressed concern that the current EV technology cannot fully replicate the performance and driving experience that customers expect.

2. Supply‑Chain Constraints
   - Rare‑earth metals such as lithium, cobalt, and nickel have volatile supply chains, largely dominated by China and the Democratic Republic of Congo.
   - Recent geopolitical tensions and trade restrictions have already disrupted battery production in Europe, causing a supply shortfall that could push back EV launches.

3. Economic Impacts
   - The auto sector is a major source of employment in many European countries. Transitioning to EVs may lead to significant job losses in downstream sectors such as engine manufacturing, lubrication, and aftermarket services.
   - Small and medium‑sized enterprises (SMEs) that produce ICE components are already lobbying for a more gradual transition.

These concerns were echoed in a series of statements issued by the European Automobile Manufacturers Association (ACEA) and the German Association of the Automobile Industry (VDA) in early 2024, calling for a “flexible, phased approach” rather than a hard deadline.

3. Why the EU Is Re‑Examining the 2035 Deadline

The shift in stance comes at a politically and economically sensitive moment:

• Upcoming European Elections
  The EU’s institutional calendar is gearing up for the 2025 European Parliament elections. Several political parties, particularly on the right of the spectrum, have pledged to “protect Europe’s automotive jobs” and to “slow down the pace of EV transition.” This political pressure is prompting the Commission to consider a more “realistic” timeline.

• Internal Policy Negotiations
  In September 2023, the European Commission announced a review of the “Clean Vehicles” directive to “ensure a smooth transition for all stakeholders.” The review was partially triggered by reports of consumer backlash in Germany and France, where EV sales have not yet met projections.

• Industry Feedback Loops
  The Commission has received a barrage of letters from manufacturers highlighting the cost of retooling factories and the challenges of scaling up battery production. These inputs have fed into a new consultation that invites industry, consumer, and environmental groups to propose alternative timelines and incentives.

• Geopolitical Risks
  The ongoing war in Ukraine has exposed the vulnerability of the EU’s supply chains for critical raw materials. The Commission is re‑examining the assumption that EV production can be ramped up at the speed previously planned without risking a disruption in essential component availability.

4. What a Postponement Would Mean for Stakeholders

If the EU were to shift the 2035 ban to, say, 2037 or 2038, the ripple effects would be significant:

While a delay would relieve pressure on manufacturers and the supply chain, it would also weaken the EU’s credibility as a climate leader. Critics argue that a postponed deadline would give automakers a false sense of security and could stall the momentum required to achieve net‑zero by 2050.

5. The Road Ahead

As the EU navigates this complex intersection of politics, economics, and climate ambition, a few possible scenarios emerge:

1. Maintain the 2035 Deadline with Stronger Support Measures
   The Commission could keep the hard deadline but introduce additional funding for battery production, charging infrastructure, and workforce retraining. This approach would preserve the policy’s integrity while alleviating industry concerns.

2. Adopt a Tiered Transition Model
   Rather than a blanket ban, the EU could allow hybrids to remain on the road until 2035, while gradually tightening restrictions on ICEs by engine size or emission levels. This would let automakers align more closely with market demand.

3. Full Reversal to a Flexible Timeline
   A complete postponement would satisfy industry pressure but would likely trigger backlash from environmental groups, consumer advocates, and climate‑oriented political parties. It could also jeopardize EU compliance with the Paris Agreement targets.

The outcome will hinge on the Commission’s ability to broker a consensus that balances the EU’s climate commitments against the real‑world constraints of the automotive industry. The “undoing” of the 2035 ICE ban, whether partial or full, will not only reshape the EU’s car market but also set a precedent for how climate policy interacts with industrial reality in the decades ahead.