Why scrapping the 2035 cars target is misguided

The European People’s Party would be wrong to weaken the rule that is driving the EU car sector’s climate and industrial transitions.

Julia Poliscanova is Senior Director for Vehicles & E Mobility Supply Chains at Transport & Environment

Electric cars have seen remarkable growth since 2020. Governments from east to west rightly see them as an essential policy to deal with runaway transport emissions. The EU is not alone in requiring only emissions-free new cars to be sold after 2035; the UK, California, Canada and Chile all have similar plans.

Now some conservative politicians want to see the 2035 EU target scrapped, having promised voters not to ‘ban’ their cars during the EU election campaign. Politics aside, such a move would hurt the climate, Europe’s automotive industry and drivers themselves.

Take the climate first. The 2035 zero-emission car regulation, alongside the 2025 and 2030 interim targets, brings around 4Gt of CO2 savings – almost 15% of the total Fit for 55 climate package. Alongside renewables, battery electric is one of the few technologies that is commercially ready to deploy quickly to slash global carbon emissions. Dithering instead of acting will cost Europe, and the climate, dearly.

Europeans are also being misled into thinking this is some sort of car ban. The target is expressed in terms of carbon emitted, not technologies mandated. This means hydrogen fuel cell cars, battery electric and – following an 11th hour compromise – carbon neutral renewable fuels all qualify.

The latter needs implementing legislation to be enacted. We do not believe e-fuels in cars make sense on cost, climate or efficiency grounds, but the option is already there.

Next, the automotive industry. Some are saying that electric car adoption is slowing, making it impossible to meet the emission targets. But linear annual sales growth predicted by some forecasters was always fanciful. T&E predicted years back that the European EV market would stagnate in 2023/4.

This is due to the stop-go nature of the EU car emission rules. The targets get tighter once every five years, resulting in something of a lull in the in-between years. This partially explains the setback seen in the first quarter of this year in the EU. Carmakers are delaying some sales and launching new models closer to 2025, the next compliance year.

Crucially, national policy plays a big role in how well the EV market is doing. Markets with either sudden changes or no stable support framework are seeing electric sales slacken. EV sales in Germany have dropped 16% in 2024 following the abrupt withdrawal of the EV subsidy. In Italy, where the government is quite openly anti-electric car, delayed or badly designed EV incentives explain the almost zero growth.

On the contrary, markets with supporting policy frameworks see continued growth. This includes France with its stable bonus-malus tax system and the new low-cost leasing scheme, Belgium where corporate buyers are incentivised to go electric, and the UK where the ZEV mandate is kicking in this year.

All this means that the debate about the level of the targets themselves is too narrow.

Today Europe’s 2035 car regulation is perhaps the continent’s strongest EV industrial policy, pulling in dozens of billions in investment. But to be successful, the 2025-2035 targets need an accompanying automotive framework, similar to what the French are doing.

This should include supporting EV demand (where the EU Social Climate Fund can help), a package to accelerate grid upgrades and approvals to install chargers, and measures to make local manufacturing cost-competitive.

Finally, for drivers, entering the EV mass market will not be without bumps on the road as the market enters uncharted waters. But the biggest problem across European countries by far is the lack of more affordable mass market EV models.

Close to half of electric models on offer today are large, premium cars. Affordable offerings, such as the Renault 5 and VW’s ID2 are expected to hit the roads from late 2024 onwards. This is just in time for the 2025 car CO2 target, highlighting the importance of the rules for affordability. Delaying or weakening the target will cause more setbacks for Europe’s mass market drivers.

Calls to dismantle the 2035 zero-emission car target would lead to a loss of investment and leave the European auto industry less competitive and further behind global rivals. It would also deprive the European drivers of the affordable clean models needed to make the switch. Is this what conservatives and their voters really want?

With or without European carmakers, the world is going electric fast. Now that the election slogans are behind us and the hard task of reversing Europe’s green industrial fortunes is beginning, weakening the target that drives that would be misguided at best.