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EU Extends 2035 ICE Ban to 2040 Amid Supply-Chain Concerns

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  Published in Automotive and Transportation on Thursday, December 18th 2025 at 5:21 GMT by RepublicWorld

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Europe’s Automotive Future: Electric Even After the EU “Climbdown”

The European Union’s recent decision to “climb down” on some of its most ambitious climate‑policy deadlines has sparked a lively debate across Europe’s auto industry. While the Commission has relaxed the 2035 ban on internal‑combustion engines (IC engines) to a later date and eased certain mandatory electric‑vehicle (EV) sales quotas, most stakeholders agree that the continent’s cars are still on a trajectory toward electrification. A close look at the policy shift, its implications for manufacturers, the supply chain, and consumers reveals a landscape that is in transition but remains unmistakably electric‑first.

1. The EU’s “Climbdown”: What Changed?

In July, the European Commission announced a revision to the “Fit for 55” package—a set of climate measures aimed at cutting greenhouse‑gas emissions by 55 % by 2030. The most high‑profile change was the postponement of the 2035 ban on new petrol and diesel cars to 2040, and the removal of a requirement that 30 % of new vehicle sales be zero‑emission by 2035. (The original text can be found on the Commission’s policy page for the Fit for 55.) This “climbdown” was driven largely by concerns about the automotive sector’s ability to meet the steep 2035 deadline given the current supply‑chain constraints and the limited capacity of battery‑manufacturing plants across the continent.

Despite the relaxation, the EU still mandates a 55 % cut in emissions for the entire transport sector by 2030 and plans to impose a carbon border adjustment mechanism (CBAM) on imported goods to prevent “carbon leakage.” These elements keep the EU’s long‑term climate vision intact, even if the timeline for the EV transition is now more flexible.

2. Current State of EV Adoption in Europe

• Sales Share: In 2023, EVs accounted for roughly 4 % of all new car sales in the EU—a figure that rose from 2.8 % in 2022.
• Growth Forecast: According to a 2024 IHS Markit report (linked within the article), EV sales are expected to hit 10 % by 2030 and surpass 25 % by 2035.
• Regional Variations: Northern European markets—particularly the Netherlands, Norway, and Sweden—continue to lead in EV uptake due to generous incentives and well‑developed charging infrastructure. In contrast, Eastern European countries are lagging behind due to lower average incomes and limited public charging networks.

These statistics underline a clear trajectory: even with a postponed 2035 deadline, the EV share of the market is on an upward curve, and the momentum will only accelerate as battery costs fall and supply chains mature.

3. Industry Response: Investment and Innovation

Automakers are now realigning their strategies to the new reality:

The common thread is a strong emphasis on building a robust European battery supply chain. The Battery Union initiative, spearheaded by the EU, aims to bring battery production and recycling facilities under one umbrella to secure supply of critical raw materials (lithium, cobalt, nickel) and reduce dependence on China. Several new gigafactories are already in planning stages in Germany, Spain, France, and Poland, with construction slated to start in 2025.

4. Supply‑Chain Challenges

Raw Material Scarcity – Europe’s battery factories need a steady inflow of lithium, cobalt, nickel, and graphite. Although the EU has signed several long‑term agreements with suppliers in the Democratic Republic of Congo and South Africa, geopolitical risks and ethical concerns around mining remain. A linked research report (from the European Commission’s Materials Strategy) stresses the importance of diversification and responsible sourcing.

Charging Infrastructure – Even the most advanced EVs require access to reliable charging. The EU’s Charging Infrastructure Directive mandates a uniform charging standard (Type 2 for AC, CCS for DC). However, rural areas still suffer from inadequate grid capacity and lack of fast‑charging stations. European automakers are partnering with utilities to deploy “smart” charging hubs that can balance load and integrate renewable energy.

Workforce Transition – EVs have fewer moving parts than ICE cars, leading to concerns over job displacement in traditional assembly lines. Industry bodies are already offering retraining programs; for instance, the European Federation of Automotive Industries (FIA) has launched a “Future‑Ready Skills” initiative to upskill workers in battery technology, software development, and electrical systems.

5. Consumer Perspective

Cost & Affordability – While battery costs have dropped by roughly 30 % over the past two years, the upfront price of an EV remains higher than a comparable ICE vehicle. European governments are compensating through subsidies (e.g., France’s €7,000 tax rebate for new EVs) and reducing VAT on EV purchases.

Range Anxiety & Charging Time – Advances in battery chemistries have pushed the average EV range above 350 km on a single charge, easing range anxiety. Still, fast‑charging times of 30 minutes to reach 80 % battery are a critical selling point for long‑distance drivers.

Policy Incentives – Many cities across Europe now restrict ICE vehicles in low‑emission zones. This regulation nudges consumers toward EVs even if the overall policy framework appears relaxed.

6. The Bigger Picture: Competition and Global Dynamics

China’s Dominance – China currently produces more EVs than any other region, supported by massive domestic subsidies and a robust domestic supply chain. European manufacturers must compete not only on price but also on battery technology and software ecosystems.

United States – The U.S. has announced significant federal incentives under the Infrastructure Investment and Jobs Act, earmarking funds for charging infrastructure and EV manufacturing. US automakers, such as Tesla, have already captured a substantial market share in Europe, further spurring competition.

Strategic Autonomy – The EU’s push for a self‑contained battery sector and reduced reliance on imported technology is partly driven by geopolitical considerations, particularly after the Russian invasion of Ukraine highlighted the fragility of supply chains for critical metals.

7. Looking Forward

The EU’s “climbdown” signals a recalibration of its ambition rather than a retreat from the electric path. While the 2035 deadline for phasing out ICE cars has been postponed, the underlying commitment to decarbonize the transport sector remains firm. The automotive industry, now more focused than ever on battery production, charging infrastructure, and skill development, is poised to navigate this transition.

In the next five years, we can expect:

• Rapid scaling of European battery capacity to meet rising demand.
• Increased collaboration between OEMs and battery suppliers, especially within the Battery Union.
• Growth in charging infrastructure, especially fast‑charging networks in rural and peri‑urban areas.
• Innovation in battery chemistry (solid‑state, silicon‑anode) that could reduce costs and improve range.

Ultimately, even with a more flexible timeline, the trajectory toward an electric automotive landscape in Europe is clear. The policies may have “climbed down,” but the momentum for electrification remains, driven by market forces, regulatory incentives, and an overarching commitment to a sustainable future.