On March 28, 2023, the European Union (EU) Parliament approved final legislation mandating a 100% reduction in CO2 emissions by 2035. The decision effectively banned the sales of new cars that used combustion engines.
It was a stupid, short-sighted decision. The economics of the move to ban the sale of new cars with any kind of combustion engine (including hybrids) are ruinous. European car makers were begging Brussels to give them more time, and the EU Commission finally gave in.
On Tuesday, the European Commission proposed applying the ban to only 90% of vehicles. The remaining 10% of cars can be plug-ins or use "green steel" and be powered by "green" fuels.
“From 2035 onwards, carmakers will need to comply with a 90% tailpipe emissions reduction target, while the remaining 10% emissions will need to be compensated through the use of low-carbon steel … or from e-fuels and biofuels,” the European Commission said in a statement.
“The European Commission will be putting forward a clear proposal to abolish the ban on combustion engines. … It was a serious industrial policy mistake,” said Manfred Weber, president of the EPP, the largest party in the European Parliament.
Indeed, the policy was always going to be problematic. Europe just isn't ready for an all-EV fleet of domestic automobiles. While Germany, France, and Great Britain have adequate numbers of chargers and a decent EV maintenance infrastructure, most of the rest of the continent doesn't. Eastern Europe isn't even close, and even nations like Italy and Spain are far behind where they need to be to make the transition.
Then there's the question of EV sales plateauing.
Current sales of EVs in Europe have stalled at just over 2 million a year, as early adopters and corporate purchasing peaked out. Schmidt Automotive Research said during the opening third of 2024 Western Europe EV market share stalled at 14.4% compared with the same period last year, according to its provisional data. Other leading market forecasters still expect sales to explode and reach close to 9 million in Europe by 2030, a rate of growth that isn’t fast enough to reach the EU and Britain’s target of close to an 80% market share.
In Britain, automakers' EV sales must account for 22% of overall sales this year, rising to 25% in 2025, 33% in 2026, 38% in 2027, 52% in 2028, 66% in 2029, 80% in 2030 and 100% in 2035. In the EU a roughly similar program to outlaw ICE vehicles is defined by fleet carbon dioxide emissions.
“Already the government target for EV sales of 22% in the U.K. and EU is under threat, amid a global slowdown of EV sales, as customers seemingly turn their backs on electric technology in favor of their beloved internal combustion engine cars – although hybrid vehicle sales are maintaining some momentum – and this puts the 80% U.K./EU target of EV sales by 2030 at serious threat,” British-based auto analyst Charles Tennant said in an email exchange with Forbes.
“In the U.K. just 15.2% of new cars registered in March were EVs, down from 16.2% last year, and even this was predominantly fleet sales (30% up) as more people take advantage of the lower tax breaks enjoyed by EV company cars. In growth terms EVs increased by a paltry 4% in the U.K. in March, whereas hybrids surged by 20% in a market that grew by 10.4%," Tennant told Forbes.
There's a way that auto makers will be able to fudge the numbers a bit to come into compliance. Gasoline-powered "range extenders" will allow EV's to increase their mileage and emit less CO2.
"Essentially, the scheme would give automakers more emissions credits for range extenders than plug-in hybrids because they emit less CO2 than hybrids, two officials said," reports Politico.
China is cheating, of course. They are subsidizing EVs to the point where the EU is seriously considering stiff tariffs. It's unnecessary. China has won the EV race, given the government's commitment to EVs. Their problem is going to be electricity generation, causing air pollution. They are trying to wean their grid off of coal. In 2024, more than 60% of electricity generated in China came from coal-powered electrical plants. That percentage dropped to 55% in 2025.
Let China build all the EVs they want. They're still expensive status symbols that require further investment in EV infrastructure.
