Opinion
Two years ago, the European Union decided to impose a mandate, banning the sale of all new petrol and diesel cars by the year 2035.
Now, just a decade out from this historic target, the mandate is up for review with the process likely to begin in the coming year.
For EV evangelists and climate activists alike, this potential rollback represents a regressive legislative decision that could slow down the widespread adoption of EVs and jeopardise a successful green transition.
Why is the EV mandate under review?
Since the legislation was passed in the European Parliament, much has changed, both in the EV space and in global politics at large. The seemingly unstoppable EV boom, stoked by rapidly evolving technology and rampant investment, has subsided exposing a slightly more lukewarm reception for electric models.
Relatively low profit margins in EV manufacturing have prompted many traditional OEMs and legacy automakers to refocus on petrol and hybrid models.
Combined with persistently high upfront costs and a lack of robust charging infrastructure, this shift has dampened enthusiasm for EVs, particularly when compared with the wistful optimism of 2023 forecasts.
Geopolitical factors such as the reversal of the EV tax credit under Trump and the disruptive impacts of tariffs have further clouded the outlook, undermining global demand and fragmenting any attempt at a unified international EV strategy.
With the global EV market facing uncertainty, many OEMS have called for a relaxation of the EU’s EV strategy to reflect current market realities.
Antionio Filosa, CEO of Stellantis, urged Europe to rollback on its EV stance, contending that strict regulations were placing a noose on an already squeezed industry.
“If there is a change which is big and urgent in regulation, obviously we will multiply our investment in Europe. What the example of the US shows is that when there is reasonable change in regulation that gives back . . . freedom of choice . . . automakers see there is growth.”
Similarly, Ola Källenius, head of European car industry body Acea and the CEO of Mercedes-Benz, warned that the European Commission would be making “a catastrophic mistake” by standing firm on its current emissions policy, cautioning that overregulation could shrink the automotive market further.
Europe’s second roll-back
The European Parliament has already revised its vehicle emissions policy once before, offering an olive branch to the already struggling European automotive market back in May 2025.
Under the revised legislation European carmakers were granted the option to spread out their compliance with the rules over three years so as to avoid hefty fines. The motion passed with 458 votes in favour, 101 against and 14 abstentions.
Avoiding the EV slowdown
Despite mounting pressure from automakers, many battery manufacturers rely on the EU’s vehicle emission mandate as a means to guarantee long-term investment. Should the EU remove this incentivizing regulation many of the battery makers who strategically moved production to the EU as a direct response to emissions regulation could find themselves stranded in a more hostile EV climate.
And it’s not just battery makers who stand to lose. With Europe already lagging behind China in the global EV race, further backtracking could prove economically disastrous.
China, now the world’s largest automotive market, has emerged as a formidable rival to both the U.S. and Europe in the EV space.
Access to rare earth materials and significantly lower manufacturing costs allow Chinese automakers to undercut legacy OEMs, developing new electric models in as little as 18 months – compared to an average of seven years for American and European manufacturers.
Any relaxation of EU emissions regulation risks deepening this competitive divide, widening the chasm between European and Chinese automakers. Declaring defeat in this space would have repercussions far beyond automotive sales.
The technologies driving EV innovation are also foundational to the broader tech and connectivity industries; failing to compete risks granting China a dominant position across multiple sectors.
The recent Nexperia chip shortage placed a magnifying glass on the disastrous consequences of an over-reliance on Chinese markets for vital components. Rolling back EV innovation and investment in Europe will only serve to increase reliance on the Chinese markets and further weaken global supply chains, leaving the continent more vulnerable to global trade disputes and the impact of international tariffs.
Reasons for EV optimism
Many analysts have accused OEMs of an overly pessimistic outlook on the global EV market. While the U.S. market has been dampened by a fossil-fuel-friendly administration, elsewhere the EV transition is gathering pace. Every second car bought in China last year was a new-energy vehicle and EV investment in Latin American markets is on the rise.
Meanwhile, last month in the UK, EV sales were at a record high, with EVs making up a quarter of the UK’s overall car market- fully electric cars accounted for 25.4% of all new registrations last month. It seems, despite market scepticism, global momentum for EVs is steadily growing.
Given this progress, maintaining strong incentives for the green transition is even more critical than ever. If the EU retreats from its ambitious EV mandate, it risks not only environmental setbacks but also long-term damage to investment in electric vehicles and battery technology, undermining Europe’s competitiveness against China.
Despite industry pessimism, the current slowdown is likely just a temporary dip in an otherwise inevitable shift toward electrification. Whilst geopolitical setbacks have rocked the curve growth, analysts, politicians and scientists alike largely agree on the need to electrify.
The EU must stand firm in its commitment and weather the short-term challenges if it hopes to remain a serious contender in the global automotive market. The road to electrification is not only inevitable, it is a matter of environmental and geopolitical urgency and, let’s face it, a race that Europe simply cannot afford to lose.
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