Europe's auto industry future may be electric even after EU climbdown

Advertisement

Brussels' proposal to abandon a 2035 deadline for a total shift to fully electric driving allows Europe's legacy carmakers more time to sell hybrids, but for the longer term, EVs are still the future, analysts and experts said.

Last month, the European Commission published plans to abandon an effective 2035 ban on combustion engine cars, after lobbying from the region's auto sector, helping them better compete against fast-moving Chinese rivals.

Plug-in hybrids, range-extended EVs, which use a small combustion engine to recharge the battery, and even conventional engines would remain legal beyond 2035.

Brussels also proposed a new category of small EVs with extra credits for models built in Europe - concessions that industry analysts say deliver much of what carmakers lobbied for.

Time to catch up with the Chinese?

"The Commission has allowed Europe's car industry to make choices and have a chance to compete," said Phil Dunne, a managing director at consultancy Grant Thornton Stax.

"Hopefully it allows Europe's industry to catch up with the Chinese" with cost-competitive EVs, he added.

Premium brands such as Mercedes and BMW will have longer to sell plug-in hybrids before selling only full EVs.

With a wide range of smaller models, such as the Fiat 500 and Clio, Stellantis and Renault, should benefit from the new subsidised category of small EVs for the continent's city-dwellers.

The EU's stance is very different to that of the United States, where President Donald Trump has withdrawn support for EVs.

Last year, Brussels imposed tariffs on Chinese-made EVs, but it has done little to stop brands like Changan expanding in Europe.

BYD and other Chinese companies face no tariffs on imported plug-in hybrids and a number of Chinese companies sell combustion engine models in markets, including Poland where EV sales are low.

Consultancy AlixPartners forecast Europe's fully-electric cars would only make up 62% of sales by 2035 because it was not convinced the ban could be enforced.

Partner Nick Parker said he did not expect any major changes to the consultancy's forecast.

A slower transition to electric would, however, give markets time to build charging infrastructure, one of the main reasons for the slow take-up of EVs.

EU fully-electric car sales rose by 25.7% year-on-year through October, accounting for 16.4% of all sales, according to industry data. They make up a tiny portion of overall sales in southern and eastern Europe.

Carmkers pour billions into designing EVs

The change in policy is a blow for automakers and suppliers that have spent tens of billions of euros designing electric cars and expanding factory capacity based on EU policy that only became law in 2023.

But allowing traditional automakers to use different technologies may spur them to partner on developing affordable EVs, such as the tie-up between Ford and Renault made public last week to develop small EVs in Europe.

The day before the EU announcement, the US automaker made public a $19.5 billion writedown and plans to scrap several electric models.

"This will end up driving more cooperation and platform-sharing," between automakers, said Joe Stevenson, CEO of British startup Anaphite, which is developing dry coating for battery electrodes that could cut the cost of an EV.

Ford CEO Jim Farley urged Brussels to pick one policy and stick to it, rather than shifting every few months. As recently as March, the Commission gave the car industry "breathing space" by allowing automakers to comply with 2025 emissions targets over three years, with further changes nine months later.

"That's not the way to do long-term capital investment planning," Farley said. "We need certainty."

look ad Watch AD Unlock More

Advertisement

Trending
Bentley Continental GT Speed Hybrid: Where Timeless Elegance Meets Electrifying Performance
Bentley Continental GT Speed Hybrid: Where Timeless Elegance Meets Electrifying Performance
Read more >>
Dubai Unveils Dh1.4 Billion Stormwater Drainage Upgrade to Future-Proof City Infrastructure
Dubai Unveils Dh1.4 Billion Stormwater Drainage Upgrade to Future-Proof City Infrastructure
Read more >>
Iran-Israel Tensions Threaten Global Oil Supply: Strait of Hormuz Closure Could Send Prices Soaring
Iran-Israel Tensions Threaten Global Oil Supply: Strait of Hormuz Closure Could Send Prices Soaring
Read more >>

Advertisement

Oil Prices Rally to 7-Week High on U.S.-China Trade Deal Optimism
Oil Prices Rally to 7-Week High on U.S.-China Trade Deal Optimism
Read more >>
e& Reports Record Growth in Q1 2026, Solidifying Its Position as a Global Tech Leader
e& Reports Record Growth in Q1 2026, Solidifying Its Position as a Global Tech Leader
Read more >>
Oil Prices Could Skyrocket Past $100 Amid Middle East Tensions, Analysts Warn
Oil Prices Could Skyrocket Past $100 Amid Middle East Tensions, Analysts Warn
Read more >>
Le Mans Legends: Where History, Speed and Investment Collide
Le Mans Legends: Where History, Speed and Investment Collide
Read more >>
UAE Drivers Alert: Major Road Closures This Sunday - Plan Your Route Now!
UAE Drivers Alert: Major Road Closures This Sunday - Plan Your Route Now!
Read more >>
Dubai Unveils Dh6 Billion Road Upgrade Plan to Revolutionize Urban Mobility
Dubai Unveils Dh6 Billion Road Upgrade Plan to Revolutionize Urban Mobility
Read more >>

Advertisement

Judge Reaffirms Block on Elon Musk's $55.8 Billion Tesla Pay Package Despite Shareholder Vote
Judge Reaffirms Block on Elon Musk's $55.8 Billion Tesla Pay Package Despite Shareholder Vote
Read more >>
MEVP Achieves 5x Return with Strategic Exit as Japan's giftee Acquires Majority Stake in YGG
MEVP Achieves 5x Return with Strategic Exit as Japan's giftee Acquires Majority Stake in YGG
Read more >>
Dh332 Million Umm Suqeim Street Upgrade Nears Completion, Set to Slash Travel Time by 61%
Dh332 Million Umm Suqeim Street Upgrade Nears Completion, Set to Slash Travel Time by 61%
Read more >>
du Reports Stellar Q1 2026 Results with 19.8% Net Profit Surge
du Reports Stellar Q1 2026 Results with 19.8% Net Profit Surge
Read more >>
e& Announces Record 2024 Financial Results with Dh10.8 Billion Net Profit and 83 Fils Dividend
e& Announces Record 2024 Financial Results with Dh10.8 Billion Net Profit and 83 Fils Dividend
Read more >>
UAE Banks Shine in Q1 2026: Record Profits Amid Global Economic Headwinds
UAE Banks Shine in Q1 2026: Record Profits Amid Global Economic Headwinds
Read more >>
Sharjah Islamic Bank Boosts Nasdaq Dubai's Sukuk Market with $500 Million AT1 Listing
Sharjah Islamic Bank Boosts Nasdaq Dubai's Sukuk Market with $500 Million AT1 Listing
Read more >>
Carrefour Bids Farewell to Oman Market After Decades of Service
Carrefour Bids Farewell to Oman Market After Decades of Service
Read more >>
Borouge and Adnoc L&S Forge 15-Year Mega Deal to Boost UAE Petrochemical Exports
Borouge and Adnoc L&S Forge 15-Year Mega Deal to Boost UAE Petrochemical Exports
Read more >>
e& UAE Launches Innovative Kids SIM Card with Advanced Parental Controls
e& UAE Launches Innovative Kids SIM Card with Advanced Parental Controls
Read more >>
Suzuki Swift Production Halt Linked to China's Rare Earth Export Restrictions
Suzuki Swift Production Halt Linked to China's Rare Earth Export Restrictions
Read more >>
Recommended
Le Mans Legends: Where History, Speed and Investment Collide
Le Mans Legends: Where History, Speed and Investment Collide
Suzuki Swift Production Halt Linked to China's Rare Earth Export Restrictions
Suzuki Swift Production Halt Linked to China's Rare Earth Export Restrictions
In a move highlighting the growing impact of global supply chain disruptions, Suzuki Motor has temporarily suspended production of its popular Swift subcompact due to China's tightening rare earth export policies. Industry insiders reveal this marks the first major Japanese automaker affected by Beijing's recent trade measures.
Bentley Continental GT Speed Hybrid: Where Timeless Elegance Meets Electrifying Performance
Bentley Continental GT Speed Hybrid: Where Timeless Elegance Meets Electrifying Performance
In the realm of automotive aristocracy, Bentley stands as a crown jewel. Born from racing heritage with legendary victories, the marque evolved through its Rolls-Royce era before emerging stronger under Volkswagen's stewardship. The Continental GT became its renaissance masterpiece - a perfect marriage of breathtaking design, thunderous performance, and peerless craftsmanship. Now in its fourth iteration, we experienced Bentley's vision of "fine driving" in the exclusive Continental GT Speed Hybrid First Edition - here's why this grand tourer redefines automotive excellence.
UAE Banks Shine in Q1 2026: Record Profits Amid Global Economic Headwinds
UAE Banks Shine in Q1 2026: Record Profits Amid Global Economic Headwinds
The UAE's banking sector has defied global economic challenges to deliver an impressive first quarter performance in 2026, with the nation's top lenders reporting robust growth across key financial metrics. Fresh analysis from Alvarez & Marsal (A&M) reveals the UAE's ten largest listed banks collectively saw net income surge to Dh22.2 billion - an impressive 8.4% increase compared to the previous quarter. This stellar performance was driven by a remarkable 59.3% reduction in impairment charges a

Advertisement