Germany leads reversal of EU’s 2035 internal combustion engine ban

Roughly two years after it came into effect, the European Union’s decision to ban gasoline vehicles by 2035 has been overturned following pressure from the German government.

Behind the reversal of this decision were Germany, home to Europe’s largest automotive industry, and the European People’s Party (EPP), the “center-right” group in the European Parliament (EP) to which both Ursula von der Leyen and German Chancellor Friedrich Merz belong.

It was their pressure that spurred the European Commission into action, as Berlin shifted from potentially abstaining in the vote to actively weakening the entire internal combustion engine ban—all within three weeks.

According to the new proposal, the ban will be replaced with a target to reduce emissions by 90% in all cars sold after 2035. This means that after 2035, a range of vehicles, including pure internal combustion engines and plug-in hybrids with both an internal combustion engine and an electric motor, will remain part of the mix.

Germany and the EPP argued that a complete ban restricted the ability of European automakers to compete and deprived consumers of their freedom of choice.

“Six months ago, it would have been unthinkable for the Commission to make this course correction,” said an EU diplomat, describing Germany’s “decisive intervention” as a turning point in the law’s fate and signaling the end of “pure electric ideology.”

Manfred Weber, president of the EPP, which won a majority in the EP in 2024, had stated that repealing the ban would be his top priority in the new term.

Weber declared victory on Tuesday, calling the reform law that reduces the 2035 emissions target from 100% to 90% a “major cut”:

“We can only succeed in the fight against climate change with an economically sensible approach. Internal combustion engines will be allowed to be sold in the European Union after 2035.”

Cars account for 16% of EU emissions, making the ban a crucial and certainly the most visible pillar of the EU’s climate policy to achieve net-zero greenhouse gas emissions by 2050.

According to the Commission’s own calculations, reducing the emissions target to 90% means that 25% of cars sold after 2035 will still produce CO2 emissions, which corresponds to approximately 2.6 million vehicles.

The new targets are part of a broader automotive package presented by the European Commission on Tuesday. This package includes a new regulation mandating zero-emission corporate fleet targets for each EU country, a battery booster to increase supply, and a regulation that reduces bureaucratic hurdles by introducing a new small car initiative.

The aim of these measures is to support Europe’s car manufacturers, who are facing a trade war initiated by US President Donald Trump, stiff competition from Chinese rivals with high-tech electric vehicles, and stagnant sales across the bloc.

Chancellor Merz, who advocated for repealing the ban during his election campaign, adopted a more measured tone, describing the revised ban as a “clear signal” that it is “the right way to better align climate goals, market realities, companies, and employment.”

For months, Merz had been trying to persuade the ruling coalition, which brings together the conservative Christian Democrats and the center-left Social Democrats, to adopt a common position on the ban. The CDU pushed for the ban’s repeal, while the SPD wanted to preserve it.

In the end, the conservatives prevailed, demanding a regulation that strikes a balance between industrial competitiveness and climate protection.

While the Commission described it as a balanced approach that paves the way for electric vehicles to replace CO2-emitting cars, all political groups, albeit for different reasons, are calling it a disaster.

The left argues that repealing the ban will deal a blow to the climate and will not give European automakers a competitive edge.

German Green Party MEP Michael Bloss said:

“The real problem facing Europe’s car industry is not a law that will come into effect in 10 years. The problem is the collapse of European car sales in China and the continuous global decline of internal combustion engine markets. Continuing to bet on internal combustion engines is not an industry strategy; it is a failure.”

On the other hand, for the right, these measures are not enough. Volker Schnurrbusch, an MEP from Alternative for Germany (AfD), said in a parliamentary debate that the real problem is the Commission “dictating” to consumers which mode of transport to use.

The European Conservatives and Reformists (ECR) described the 2035 reform law as a missed opportunity that is “far from taking the bold steps” necessary to make the sector more competitive globally.

The differing views on the repeal of the ban will continue to be debated in negotiations among EU institutions, particularly in the Council, where Cyprus, a small country without an automotive sector, is acting as an arbitrator.

France, meanwhile, is preparing for a fight. “The negotiations are just beginning,” said a Parisian official, adding that allowing internal combustion engine vehicles to be sold after 2035 is a red line for the country, even if it obtains the desired European preference conditions.

Behind the scenes, the automotive sector will continue to lobby to further weaken the regulation. The EU car lobby ACEA said in a statement, “The announced measures mandating the greening of corporate fleets risk running counter to the necessary market and incentive-based approach.”

However, the Commission is hoping for just that, and many industry officials told POLITICO that the corporate fleets measure is intended to serve as a bulwark against the repeal of the internal combustion engine ban.

Climate Commissioner Wopke Hoekstra openly admitted this in his speech to Parliament on Tuesday evening, saying, “Corporate fleets will drive the clean transition and help car manufacturers reach their targets.”

The proposal will now be debated by member states and the European Parliament.