The Battle Lines Are Drawn
In a joint letter sent to European leaders on October 21, France and Spain made their position clear: the European Union must not waver on its commitment to end sales of new combustion engine vehicles by 2035. The document warns that any retreat from the zero-emission target would be unacceptable and could jeopardize billions of euros already invested in Europe's electric vehicle infrastructure.
"This revision should in no way call into question the zero emissions exhaust target in 2035," the letter states, according to reports from Electrive. Paris and Madrid argue that maintaining regulatory certainty is essential for the automotive sector's transformation, particularly for ongoing battery production projects and vehicle electrification initiatives.
On the opposite side, German Chancellor Friedrich Merz has promised to do "everything" to overturn the combustion engine ban, pushing for technological neutrality that would allow synthetic fuels and biofuels. Italian Prime Minister Giorgia Meloni has been even more forceful, calling the legislation "ideological madness" during recent discussions in Brussels.
The Investment Argument
France and Spain's resistance to any policy reversal is rooted in concrete economic realities. Since 2023, tens of billions of euros have been invested in electric vehicle manufacturing capacity across Europe, particularly in battery gigafactories. These investments were made based on the assumption that the 2035 target would remain in place.
The two countries also firmly reject preferential treatment for plug-in hybrid vehicles after 2035. Their position is backed by European Commission data from 2024 showing that real-world emissions from plug-in hybrids are 3.5 times higher than in approval tests, according to Italian automotive publication Quattroruote.
Von der Leyen's Balancing Act
European Commission President Ursula von der Leyen announced in late October that she would accelerate the review of CO2 emissions regulations for passenger vehicles and vans, moving the timeline forward to the end of 2025—one year earlier than originally planned. This decision came after mounting pressure from automotive manufacturers facing intense competition from Chinese electric vehicle makers.
In her communication to member states, von der Leyen suggested a potential compromise: "We remain committed to the principle of technological neutrality and cost-effectiveness. In preparing the review, we are also assessing the role of zero and low-emission fuels in the transition, such as synthetic fuels and advanced biofuels," she wrote, as reported by Italian news outlet MeteoWeb.
This language opens the door to what Germany and Italy are demanding: the possibility of using synthetic fuels in combustion engines beyond 2035. However, critics point out that e-fuels are currently produced in minimal quantities, remain expensive, and are energy-inefficient compared to direct electrification.
Market Reality vs. Political Rhetoric
The political dispute contrasts sharply with emerging market trends. According to data from the European Automobile Manufacturers' Association (ACEA), battery-electric vehicles captured 15.8% of the EU market share in the first eight months of 2025, up from 12.6% in the same period of 2024.
More striking is the performance of individual manufacturers. Volkswagen, despite being based in Germany—a country pushing for delays—saw its electric vehicle sales surge by 39.2% in the first eight months of 2025 compared to the previous year. This demonstrates that when regulatory pressure increases, manufacturers can and do respond.
Industry analysis from Autovista24 shows that Europe's battery-electric vehicle market grew by 24.9% in the first half of 2025 compared to the same period in 2024, with over 1.2 million units sold. Hybrid-electric vehicles captured an even larger market share at 34.7%, becoming the most popular powertrain choice among European consumers.
The Chinese Factor
Underlying the entire debate is the rapid advance of Chinese electric vehicle manufacturers in the European market. While European automakers hesitate, Chinese companies are making aggressive inroads. According to JATO Dynamics, BYD more than doubled its European sales in August 2025 compared to the previous year, and other Chinese brands like MG now outsell established names like Tesla and Fiat in monthly registrations.
A PwC study cited in Italian newspaper Corriere Nazionale warns that 2025 could mark the first year when more Chinese cars enter Europe than European cars enter China—a symbolic reversal that highlights the competitive threat facing the continent's automotive industry.
Environmental organizations argue that weakening the 2035 target would hand victory to Chinese competitors who have already committed to electric vehicle production at scale. Transport & Environment, a clean transport advocacy group, has warned that diluting emissions goals would mean Europe loses the global race for electric mobility leadership.
The Jobs and Competitiveness Debate
The automotive industry's traditional argument against rapid electrification centers on job losses and competitiveness concerns. German and Italian manufacturers have repeatedly stated that the transition is happening too quickly, pointing to factors like uneven charging infrastructure, high battery costs, and dependency on Asian battery suppliers.
"We are being asked to transform with our hands tied behind our backs," Mercedes-Benz CEO Ola Källenius and Schaeffler's Matthias Zink wrote in an August letter to von der Leyen, as reported by France 24.
However, green advocacy groups counter that weakening the 2035 combustion engine ban could put up to one million jobs in the emerging green economy at risk. They argue that a clear policy framework is necessary to drive investment in clean technologies and secure Europe's industrial future.
What Happens Next?
European leaders discussed the issue at a summit in Brussels on October 23, but no immediate decisions were made. The formal review of the CO2 emissions regulation is expected to be completed by the end of 2025, as confirmed by the European Commission.
Benjamin Haddad, France's minister for European affairs, emphasized the need for balance: "We must achieve this goal: it's about competitiveness and sovereignty, to reduce the EU's dependence on fossil fuels imported from other countries. But this goal must be achieved with flexibility, pragmatism and without naivety," he told Italian news agency ANSA.
The stakes extend far beyond automotive policy. Europe's decision will determine whether the continent can maintain industrial competitiveness while meeting climate commitments, or whether it will cede technological leadership to rivals in Asia and North America. As EUobserver notes, Germany, France, Spain, and Italy—accounting for 70% of EU new car registrations—are all reviewing their electric vehicle support schemes in the coming months.
Whatever path Europe chooses will have consequences lasting decades, affecting not only the automotive industry but also the global effort to address climate change. The current dispute reveals that the transition to electric mobility is not merely a technical challenge but fundamentally a political one—a test of whether Europe can unite behind a common industrial and environmental strategy, or whether national interests will fragment the continent's approach to its automotive future.
