The European Union is preparing to roll back a controversial policy that would have effectively banned new gasoline and diesel vehicles starting in 2035, signaling a significant shift in the bloc’s approach to vehicle emissions amid growing pressure from the automotive industry and changing global economic conditions.According to officials familiar with the proposal, the European Commission is expected to unveil measures that soften emissions requirements for new cars, allowing manufacturers greater flexibility in meeting climate targets. Rather than a complete phase-out of internal combustion engines, the revised framework would permit certain plug-in hybrid vehicles and electric models equipped with fuel-powered range extenders to remain on the market beyond 2035.Under the proposal, automakers would be required to reduce tailpipe emissions by 90% by the mid-2030s, down from the previously stated goal of a 100% reduction. Manufacturers would also be expected to offset remaining emissions through the use of low-carbon or renewable fuels, as well as materials such as locally produced green steel..European officials have framed the move as a response to mounting economic and geopolitical pressures, including rising trade tensions with the United States and China and concerns over industrial competitiveness.While the EU remains legally committed to achieving climate neutrality by 2050, several member states and industry groups have warned that rigid timelines could threaten jobs, investment and domestic manufacturing capacity.Spain’s Minister for the Ecological Transition, Sara Aagesen, acknowledged the complexity of the situation, saying the European Commission has already introduced flexibilities in the past. She has previously defended the 2035 target but emphasized the need to balance climate commitments with economic stability..The European Commission has declined to comment publicly on the details of the proposal, which is expected to be adopted by commissioners and then debated by the European Parliament and member states. Any final changes would be negotiated through trilogue talks involving all three institutions.The planned shift comes as global enthusiasm for rapid electric vehicle adoption has cooled. New electric vehicle registrations in the EU fell to about 1.45 million in 2024, down from 1.54 million the year before, as governments scaled back purchase incentives and consumer demand softened.Automakers have also struggled to make electric vehicles profitable. Ford Motor Co. announced this week it will take $19.5 billion in charges related to a major overhaul of its EV business. The company said it will cancel a planned electric F-Series truck, repurpose an EV battery plant and shift production toward gasoline and hybrid vehicles..As part of the restructuring, Ford will end production of the fully electric F-150 Lightning pickup and replace it with an extended-range hybrid model. Most of the charges are expected to be recorded in the fourth quarter.The EU’s move aligns more closely with developments in the United States, where President Donald Trump has rolled back vehicle efficiency standards introduced by the previous administration. Globally, automakers are reassessing electric-only strategies as competition intensifies, particularly from Chinese manufacturers, which continue to expand their share of both domestic and international markets.Environmental groups have criticized the proposed EU changes, warning they could weaken Europe’s climate ambitions and allow new loopholes that slow the transition to fully electric transportation. Supporters of the revisions argue the added flexibility is necessary to protect jobs, maintain competitiveness and ensure a more orderly transition.The proposal underscores a broader reassessment of green industrial policies as governments weigh climate goals against economic realities, supply chain pressures and shifting consumer demand.
