EU Carmakers Demand Flexibility Beyond 2035 Combustion Ban

Europe’s at a crossroads in its quest for industrial decarbonization, and the big wigs at ACEA (that’s the European Automobile Manufacturers’ Association) and CLEPA (the European Association of Automotive Suppliers) just sounded a pretty stark alarm: the EU’s plan to outlaw new combustion-engine cars by 2035 might be dreaming if it doesn’t reckon with industry realities and geopolitical hurdles.

ACEA, based in Brussels, rallies the titans of the car world—think Mercedes-Benz, BMW and Volkswagen—while CLEPA speaks for more than 3,000 suppliers, from Schaeffler AG to Valeo. Together, they wield enough clout to shape EU policy on emissions, tech standards and overall competitiveness.

Watching from the frontline where policy and supply chains meet, it’s clear this debate is raising a red flag: you can’t just write regulations and expect decarbonization to fall into place.

Backdrop: Policy Ambition vs. Market Plateau

Remember the European Green Deal and Fit for 55 push? Brussels aims for all new cars and vans to hit zero-emission technology status by 2035, with a 55% CO₂ cut for passenger cars by 2030. Automakers have played along, chipping away at targets since 2005—from shrinking engines and slapping on turbochargers to rolling out mild hybrids. But jumping straight to full battery-electric vehicles (BEVs) is a whole different ballgame.

Take the mid-2023 CO₂ rules: the EU set its sights on a 100 g/km average for new cars by 2030. Automakers sprinted to hit that mark while quietly laying the groundwork for BEVs. The problem? Turning fancy fleet averages into cars people can actually afford is proving trickier than expected.

Even after introducing more than 200 BEV models, electric cars still make up just 15% of new registrations in the EU as of mid-2025. Folks in the know point to a perfect storm of challenges:

• Asian Battery Dominance: Over 70% of battery cell capacity sits in China, South Korea and Japan, so Europe ends up importing most critical components.
• Inequitable Charging Rollout: Western Europe boasts more than 10 chargers per 100 km of road, but some Eastern member states barely scrape 2.
• Inflationary Pressures: Since 2021, raw materials, energy and logistics costs have jumped 20–30%, eating into EV margins.
• Geopolitical Frictions: US-China trade spats and export controls threaten supplies of catalysts, semiconductors and strategic metals.

Today’s Call for Tech Neutrality

On 28 August 2025, ACEA boss Ola Källenius (Mercedes-Benz) and CLEPA chief Matthias Zink (Schaeffler) teamed up to urge the European Commission to stop betting only on batteries and embrace a broader mix of zero-emission technology. Their pitch? Bring hydrogen fuel cells, plug-in hybrids and e-fuels into the fold:

• Hydrogen Fuel Cells: Cars that use green hydrogen to generate electricity, kicking out nothing but water vapor—though robust hydrogen infrastructure is still in its infancy.
• Plug-in Hybrids: With 10–20 kWh battery packs, these rides cover 50–60 km on electric power—enough for everyday errands and to calm range jitters.
• Decarbonized Fuels (E-Fuels): Synthetic hydrocarbons made by combining renewable hydrogen and captured CO₂. They drop right into existing engines.

CLEPA argues suppliers are more prepared for hydrogen systems and e-fuel compatibility than current rules acknowledge, and that revamping factories solely for BEVs risks leaving assets stranded.

Their letter makes the case that a technology-neutral path would protect jobs, keep Europe competitive and hit CO₂ goals—without triggering chokepoints in the supply chain.

Granted, plug-in hybrids are more of a stepping stone—they slot into existing lines with minimal tweaks, and infrastructure upgrades stay modest. E-fuels offer that slick “drop-in” promise at gas stations, though today they still carry a hefty price tag compared to fossil fuels.

Fact Check: Separating Signal from Noise

Let’s see how the headline claims hold up:

• EU’s battery dependency is near-total: TRUE. Independent reports confirm Asia’s stranglehold on cell production and raw materials.
• Charging infrastructure is uneven: TRUE. EU data show stark contrasts between member states.
• All-EV mandate is unrealistic: INCONCLUSIVE. Automakers cite operational headaches, but no official audit has thrown down a “2035 is impossible” verdict.
• 2030/35 CO₂ targets unachievable: INCONCLUSIVE. Industry voices worries, but regulators haven’t budged on targets pending more analysis.

Spotlight on Hydrogen Fuel Cell Vehicles

Hydrogen fuel cells boast high energy density and lightning-fast refueling, making them tempting for long-haul haulers and heavy-use fleets. Here’s the gist: hydrogen and oxygen react across a proton exchange membrane (PEM), wiring up electricity without burning anything—say goodbye to particulates. But hurdles remain:

• Production Scale: EU electrolyzer capacity is still in the low hundreds of megawatts, far from the gigawatt scale we need.
• Distribution Challenges: Compressing hydrogen, building high-pressure pipelines and setting up storage tanks isn’t cheap.
• Energy Efficiency: Well-to-wheel efficiency trails battery-electric vehicles, so you need more renewable juice per kilometer.
• Certification & Standards: EU-wide rules on hydrogen purity and safe refueling are still evolving, leaving station operators in limbo.

Wider Ripple Effects

This debate isn’t just about tailpipe emissions—it echoes across the whole value chain:

• Jobs at Stake: Suppliers like Continental AG have already warned of cuts as EV demand plateaus.
• Investment Flows: R&D and manufacturing could drift to regions with more phased approaches if mandates stay rigid.
• Consumer Costs: Today’s EVs carry a 20–30% premium over traditional cars, slowing mass adoption.
• Regional Equity: Uneven rollout of chargers or hydrogen infrastructure risks sidelining less affluent member states.
• Sector Coupling: A beefed-up hydrogen ecosystem for mobility could spill over into steelmaking and chemicals, boosting wider industrial decarbonization.
• Global Policy Signal: Whatever the EU decides will send ripples from California to China.

Looking Ahead: The Crossroads

Brussels now faces a big decision: stick to the 2035 BEV-only goal or roll out an industrial decarbonization roadmap that keeps multiple technologies in play. Mark your calendars for these milestones:

• Q4 2025: Commission review of CO₂ targets—could tweak or even delay the 2035 ban.
• 2026: Launch of EU-backed funds to scale up hydrogen infrastructure and electrolyzer plants.
• 2027–2028: Ramp-up of e-fuel pilot plants across Germany, Scandinavia and Iberia.

Meanwhile, in the European Parliament’s ENVI committee, some MEPs are already pushing to soften the 2035 deadline, arguing that a one-size-fits-all ban glosses over real hurdles in different member states.

On the flip side, an all-electric mandate could demand up to €50 billion in extra public funding over the next decade just to level up charging networks and battery supply—money that could also seed green hydrogen corridors and e-fuel hubs.

If Brussels opts for a flexible approach, we might see a boom in hydrogen production, fresh partnerships between automakers and electrolyser specialists, and the birth of new fueling corridors. Go rigid and EV-only, and manufacturers may look elsewhere or lean on hefty subsidies to make the numbers work.

The coming months promise a tug-of-war between environmental idealists and industrial realists—a showdown that’ll shape Europe’s roads, factories and fueling stations for decades to come.