European Commission proposes flexibility on 2035 target
The European Commission has moved to soften one of the European Union’s most consequential climate-and-industry policies: the planned phaseout of new gas-powered car sales by 2035. Citing a need for “flexibility,” the Commission’s revised approach would no longer require that 100% of new cars sold in 2035 be zero-emission vehicles. Instead, it would permit up to 10% of new sales to be hybrids or other non-zero-emission models, provided manufacturers purchase carbon offsets to compensate for the emissions.
The shift is framed as part of a broader Automotive Package intended to help Europe’s car industry remain both clean and competitive as global markets accelerate toward electrification. The proposal must still win approval from the European Parliament, but it is already reshaping the political and commercial debate around how quickly Europe should push its transport transition.
Pressure from incumbents, anxiety from startups
If adopted, the policy adjustment would likely address long-running demands from traditional European automakers for more time and leeway as they transition away from combustion engines and beyond hybrids. Established manufacturers have argued that a hard 2035 cutoff risks stranding investments, raising prices, and exposing them to intensified competition at a moment when the market is being transformed by Tesla and a wave of lower-cost electric vehicles from China.
But the Commission’s flexibility has opened a rift with parts of Europe’s EV startup ecosystem and its investors, who say the change weakens the very policy signal needed to scale manufacturing, charging infrastructure, and supply chains across the continent.
“China already dominates EV manufacturing,” said Craig Douglas, a partner at World Fund, a European climate-focused venture capital firm. “If Europe doesn’t compete with clear, ambitious policy signals, it will lose leadership of another globally important industry — and all the economic benefits that come with it.”
Douglas was among the signatories of “Take Charge Europe,” an open letter published in September and addressed to Ursula von der Leyen, President of the European Commission. Senior executives from companies including Cabify, EDF, Einride, and Iberdrola, along with numerous EV-related startups, urged Brussels to “stand firm” on the original 2035 zero-emission target.
Supporters of the revised plan argue that the EU must balance decarbonization with the economic realities of a sector that remains a major employer. The traditional automotive industry accounts for roughly 6.1% of total EU employment, a statistic frequently cited by those warning against abrupt policy shifts that could trigger job losses or factory closures.
Even automakers disagree on the best path
The debate is not simply “startups versus incumbents.” Some established carmakers have also warned that stepping back from long-term commitments could undermine Europe’s competitiveness.
In comments reported by Swedish media, a Volvo press officer cautioned that “backing down on long-term commitments in favor of short-term gains risks undermining Europe’s competitiveness for many years to come.” Volvo has indicated it is comfortable with the original 2035 timeline, contrasting with other manufacturers that have pushed for more flexibility.
Rather than relaxing the deadline, critics say the EU should focus more aggressively on enabling conditions for mass EV adoption—especially charging. They argue that if policy becomes less stringent, investment in charging infrastructure could slow, leaving consumers hesitant and manufacturers with weaker demand signals.
Issam Tidjani, CEO of Berlin-based charging marketplace startup Cariqa, echoed that concern and warned that flexibility can become a recurring delay mechanism. “History shows that this kind of flexibility has never worked out well,” Tidjani said. “It delays scale, weakens learning curves, and ultimately costs industrial leadership rather than preserving it.”
Battery Booster aims to shore up Europe’s supply chain
Alongside the proposed 2035 adjustment, the Commission is also advancing industrial measures designed to strengthen Europe’s EV supply chain. A central piece is the Battery Booster, a strategy that would invest €1.8 billion (about $2.11 billion) to support a more fully European battery ecosystem, aimed at local production capacity and supply security.
The initiative has drawn praise from parts of the battery sector. French battery cell maker Verkor described the Booster as “a necessary step to scale up Europe’s battery industry.” The company opened its first large-scale battery factory in northern France this week, positioning itself as a new European contender after the struggles of Swedish battery maker Northvolt.
Still, some stakeholders question whether targeted supply-chain funding can compensate for what they view as a diluted regulatory push. In their view, the strongest driver of investment is a clear, durable demand trajectory—something they fear the revised 2035 rule could weaken.
Cost concerns and UK uncertainty add to “mixed signals”
The Commission’s approach also raises practical questions about implementation. Traditional automakers have already warned that the requirement to buy carbon offsets to qualify non-zero-emission sales could increase vehicle costs, potentially undermining affordability and competitiveness—two goals the Commission says it is trying to protect.
Another variable is whether the United Kingdom will mirror the EU’s shift. It remains unclear if the UK will modify its own 2035 combustion-engine phaseout. Unlike the EU and the U.S., the UK has not imposed tariffs on Chinese EV imports, even as their market share rises—an issue that has become politically sensitive for domestic manufacturers.
At stake is more than a single regulatory threshold. The dispute highlights a broader tension in climate policy: how to balance rapid decarbonization with the near-term constraints of legacy industries, consumer prices, and infrastructure readiness. As lawmakers weigh the Commission’s proposal, the outcome will shape whether Europe leads—or follows—in the next phase of the global EV race.
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