AUTONEWS

Why the end of combustion engines in 2035 won't happen?
The measure had been contested: industry associations complained; some automakers didn't miss an opportunity to claim that it would be insane for the automotive industry, especially the European one, to end combustion engines in 2035. And many consumers thought the electric transition that the European Commission intended to implement was very "forced," in the literal sense of the word. But the "no mercy," after all, has room to be softened, and so much so that, in 2035, instead of completely eradicating new gasoline or diesel vehicles from European showrooms, it is most likely that up to 30% of sales at that time will (still) be models with combustion engines (mainly hybrids and PHEVs). This is because the European Parliament approved a proposal that lowers the carbon dioxide (CO₂) reduction target from 100% to 87.5%, compared to 2021 levels.
This drastic reversal in decarbonization targets for passenger and commercial vehicles will still have to be submitted to a plenary vote in the European Parliament, which should happen next December, anticipating negotiations with the Council of the European Union with a view to final approval of the new directive—something that, naturally, will only happen in 2027.
The most skeptical may understand that this change is not very substantive, considering that 90% was mentioned as an interim proposal to avoid and soften the absolute 100% cut initially announced in 2023. However, this is not quite the case: the new proposal from the European Parliament is rich in mathematical subtleties, sustainability incentives, and a genuine engineering of credits and super-credits that make the calculations worthy of explanation. What's on the table now is that, instead of manufacturers being required to reduce their average tailpipe emissions by 100%, they will have a 95% cut. However, a compensation mechanism of up to 7.5 percentage points is introduced through the use of low-carbon steel (green steel) produced in Europe. As a result, if manufacturers maximize the use of this measure, sustainable steel allows them to lower the limit to 87.5%. This opens not just a window, but a door of opportunity for hybrid vehicles to remain a viable purchase option. But there's more.
So what happens to the multi-million dollar fines?
There are also changes on this point, and they are not insignificant, with European legislators yielding to intense pressure from automakers and industry associations who saw the astronomical fines for non-compliance as a mechanism that would strangle car manufacturers and undermine their competitiveness against (Chinese) competition. The new proposal maintains the punitive impetus, but offers a series of escape valves to alleviate the financial pressure on manufacturers, giving them new breathing room to face the energy transition without having the daunting scenario of inaccessible sanctions ahead.
How are the calculations now made? The fine remains at R$ 95 for each gram of CO₂/km exceeded, multiplied by the total number of new vehicles registered by the manufacturer that year. However, as the bar drops to 87.5% (with "green" steel, or 95% without it), this allows automakers to continue managing their sales mix with a small percentage of combustion engine models, without incurring sanctions. Manufacturers are also "challenged" to be creative in managing a series of benefits, from the aforementioned use of low-carbon steel, which allows them to go from the nominal 95% to 87.5%, to the multiplier effect of supercredits attributed to electric vehicles manufactured in Europe. The emphasis of the increase is on city cars and utility vehicles powered by batteries (models up to 4.2 meters in length), which count as 1.4 vehicles in the fleet average calculation.
Electric vehicles, also produced in the EU, which are considered highly efficient (i.e., stand out for their low energy consumption), are now worth 1.2 vehicles. Social leasing also boosts the result, adding +0.1 to the other multipliers. Thus, if a tram is allocated to a social leasing program, it is worth 1.5 if it is less than 4.2 meters long, or 1.3 if it is efficient. In practical terms, imagine a manufacturer sells 100,000 electric vehicles, urban or subcompact, produced in the EU. The manufacturer's average will not include 100,000 vehicles with 0 g/km of CO2, but rather 140,000. An additional 40,000 "phantom" electric vehicles are artificially injected into the average emissions calculation; these are models that were never sold but directly contribute to diluting the emissions of 40,000 combustion engine vehicles…
And, as if all these variables weren't enough to artificially lower the average emissions of automakers and avoid sanctions, it is proposed that vehicles certified to run exclusively on synthetic or renewable fuels be equated to electric vehicles, that is, they contribute "zero emissions" to the brand's average.
The total ban on the sale of new combustion-engine cars in the European Union by 2035 is being weakened and reconsidered due to pressure from automakers and countries such as Germany and France. You can follow the official discussions on the European Parliament’s portal.
What the original rule states:
• New cars only: The EU regulation prohibits only the sale of new combustion-engine cars and vans starting in 2035.
• Existing cars remain on the road: Gasoline or diesel vehicles purchased before this date may continue to be driven as usual for the remainder of their lifespan, provided they pass inspections and comply with local regulations (such as Low Emission Zones).
Why the target is shifting:
• Political and industry pressure: Traditional automakers (such as Volkswagen, Stellantis, Mercedes, BMW, and Porsche) and governments like those of Germany and France have been pushing for flexibility, citing the risk of job losses and high costs.
• Slow adoption and competition: Electric vehicle sales in Europe have grown less than expected, while Chinese manufacturers have gained ground with more competitive pricing.
• New alternatives: Recent proposals discuss allowing the use of synthetic fuels (e-fuels) or advanced biofuels, or lowering the zero-emission target from 100% to approximately 90%—which would allow for the continued use of certain types of hybrid vehicles and combustion engines.
You are correct: the strict 100% ban on new combustion engine cars in the European Union for 2035 has been revised and softened.
What Changed in the EU Policy:
• The Old Rule: The original legislation required all new cars and vans sold in the EU to have 100% zero tailpipe emissions starting in 2035.
• The Revised Target: In December 2025, the European Commission adjusted the requirement to a 90% reduction in average fleet CO₂ emissions (compared to 2021 levels) rather than a complete 100% ban.
• What Remains Possible: Car manufacturers can continue selling combustion engines, hybrids, or vehicles designed for sustainable/renewable fuels past 2035, as long as their overall fleet meets the new emission thresholds or uses compliance credits
The European Union adjusted its 2035 combustion engine policy from a complete 100% zero-emission sales ban to a 90% CO₂ reduction target, allowing manufacturers to continue selling internal combustion engines if average fleet emissions drop by 90% or through credits and low-carbon fuels.
Key Reasons Why a Strict 2035 Combustion Engine Ban Is Changing:
• Automaker Pushback and Economic Pressure: Major traditional automakers in Germany, Italy, and France (including Volkswagen, BMW, Renault, and Stellantis) lobbied hard against the total ban, citing massive financial strain, potential job losses, and factory closures.
• High EV Prices and Competition: European electric vehicles (EVs) often cost significantly more than traditional cars or cheaper Chinese alternatives (which hold a major price advantage of €6,000–€7,000).
• Slow Consumer Adoption and Infrastructure Gaps: Consumer demand has lagged in several markets, with under 10% of buyers considering EVs in parts of France and rental fleets (like Hertz and Sixt) reporting heavy financial losses or hesitating due to sparse charging infrastructure.
• Supply Chain and Material Bottlenecks: Severe global deficits in critical battery minerals (like lithium) and heavy reliance on foreign supply chains (such as China dominating battery components) created major industrial hurdles.
• Alternative Fuels (e-Fuels): Pressure from political leaders and the automotive sector opened pathways for combustion engines running on sustainable, low-carbon synthetic fuels (e-fuels) to remain legal past 2035












