EU decision to repeal ban on combustion engines by 2035 leaves carmakers at odds

In March 2021, Volvo said it would go all-electric by the end of the decade. However, the lofty EV target was scrapped in September 2024, when the Geely-owned company said plug-in hybrids would stick around for a while beyond 2030. Despite cold feet, the Gothenburg-headquartered carmaker was adamant that the European Union should maintain its goal of banning the sale of new cars with combustion engines from 2035.

When news emerged yesterday that the European Commission had proposed a package that would allow new ICE cars to exceed the originally announced deadline, Volvo was less than happy. A company spokesperson said this Automotive News Europe that reversing the ban could do more harm than good, as the decision “threatens to undermine Europe’s competitiveness in the coming years.”

Furthermore, it believes that other carmakers could have adapted their portfolios to an electric-only offering by 2035 if the ban had remained unchanged: “Volvo has built a complete EV portfolio in less than a decade and is ready to go all-electric with a bridge of long-range hybrids. If we can do it, others can too.”

Kia is also in favor of ditching conventional powertrains. In August, the company’s CEO in Europe, Marc Hedrich, said that blocking the path to a pure electric offering would have significant consequences: “There is an avalanche of electric cars coming, and if we suddenly have to stop launching electric cars, it would cost us a fortune.”

But Volvo and Kia are in the minority as other carmakers back the European Commission’s decisions this week. Reuters quotes Volkswagen calling the proposal “pragmatic” and “economically sound overall,” while Renault hailed the updated package, particularly the Small Affordable Cars initiative for electric models.

The Small Affordable Cars initiative is designed to create a new subcategory of vehicles (“M1E”) up to 4.2 meters (165.3 inches) in length, incentivizing car manufacturers to develop and build electric vehicles in Europe. Some legal restrictions will be relaxed to reduce production and sales prices. Carmakers will earn ‘super credits’ to help them meet emissions targets.

BMW has mixed feelings about the decisions made this week. On the one hand, it supports keeping combustion engines in use after 2035. On the other hand, it enforces increasingly strict CO2 emissions.₂ emissions regulations are considered a ‘shallow solution’.

Stellantis has not yet commented, but just a month ago the company made its position clear, stating that new ICE cars should be produced after 2035. Similarly, Mercedes CEO and chairman of the European Automobile Manufacturers’ Association (ACEA) recently urged the European Commission to withdraw the ban. Ola Källenius sent a letter to EC President Ursula von der Leyen, warning her that the 2035 target was unrealistic.

ACEA has one statement a few hours ago, describing the decision to lift the ban as a “first step towards creating a more pragmatic and flexible path to align decarbonization with competitiveness and resilience objectives.” However, it warns that additional measures are needed to ease the transition to electric vehicles.

Toyota, the world’s largest automaker for the fifth year in a row, is perhaps the most outspoken opponent of banning combustion engines. Chairman Akio Toyoda famously said in 2024 that electric vehicles would never exceed a 30 percent global market share. Earlier this year, are Maths show that nine million electric cars have the same carbon footprint as 27 million hybrids. His analysis took into account emissions from battery and vehicle production. As you can imagine, the claim that one electric car pollutes as much as three hybrids has caused significant controversy.

As a refresher, car companies operating in the 27 member states of the European Union must now reduce CO2 emissions₂ emissions by 90 percent compared to 2021 levels. The EC makes it clear that combustion engines, plug-in hybrids, range extenders and mild hybrids will continue to exist even after 2035. The remaining 10 percent of emissions must be offset by biofuels and synthetic fuels, as well as low-carbon steel produced in the EU.

All things considered, there is no end date for combustion engines in the EU.