EU Softens 2035 Combustion Engine Ban: EV Startups Cry Foul Amid Hybrid Resurgence

By World Report Press Desk | December 23, 2025

In a major policy U-turn, the European Commission has proposed easing its strict 2035 ban on new combustion-engine cars, allowing up to 10% of sales to include plug-in hybrids (PHEVs), range extenders, and even traditional internal combustion engines (ICE). This shift, aimed at supporting struggling automakers, has sparked outrage from EV startups who say it jeopardizes billions in investments and delays the green transition.

The proposal, unveiled on December 16, 2025, marks a significant dilution of the EU’s original zero-emission mandate, which required 100% tailpipe-free vehicles by 2035. Now, manufacturers can offset remaining emissions through innovative tools like low-carbon “green” steel made in Europe or carbon-neutral e-fuels and biofuels.

Legacy giants like Volkswagen and Stellantis are hailing the move as a “lifeline,” but pure-play EV companies warn it could hand market dominance to Chinese rivals. As global EV sales soar past 18.5 million in 2025—a 21% year-on-year jump—Europe’s hesitation raises questions about its commitment to net-zero goals.

What’s Changing in the EU 2035 Combustion Engine Ban?

The original rule was a cornerstone of the EU’s Fit for 55 climate package, targeting a full phase-out of petrol, diesel, and non-plug-in hybrids. The new proposal introduces “technological neutrality” to ease the burden:

• Hybrid Loopholes: PHEVs and range extenders can count toward quotas if emissions are minimized, with e-fuels (synthetic fuels from renewables) playing a key role.
• Offset Credits: Automakers exceeding the 10% hybrid cap can buy credits by using EU-produced low-carbon steel or biofuels derived from waste sources like cooking oil.
• Interim Relief: Relaxed 2030 CO2 targets, plus incentives for affordable small EVs built in Europe, including extra credits for zero-emission corporate fleets.

These changes address industry pleas amid slumping EV demand in Europe, where high costs and infrastructure gaps have slowed adoption.

Industry Backlash: Legacy Automakers vs. EV Innovators

Traditional carmakers are breathing a sigh of relief. Volkswagen described the plan as “pragmatic,” while Stellantis emphasized it preserves jobs in hybrid production. Industry groups argue the flexibility prevents factory closures and economic fallout.

But EV startups and advocates, including signatories to the September 2025 “Take Charge Europe” open letter, are furious. The letter, endorsed by over 150 firms from battery makers to charging networks, demanded the original ban stay intact to boost Europe’s electrification edge.

“Reopening doors to hybrids and biofuels sends the wrong signal,” said a spokesperson for a leading EV startup. “It favors incumbents with outdated tech and undermines our investments in pure battery-electric solutions.”

Environmental and Technical Impacts of the Policy Shift

Hybrids provide a practical bridge, offering 50-100 mpg in real-world driving and reducing immediate pressure on power grids. However, experts highlight that battery-electric vehicles (BEVs) deliver superior lifecycle emissions reductions thanks to simpler designs and renewable energy integration.

The softening could ease short-term grid strain but risks derailing 2050 net-zero targets if it prolongs fossil fuel dependency. Success depends on ramping up battery production, ultra-fast charging, and renewables—fields where European EV specialists are leading.

EV Market Trends: Growth Continues Despite Uncertainty

Despite policy flip-flops, European EV registrations jumped to 16% market share in the first 10 months of 2025 (up from 13% in 2024), per ACEA figures. Hybrids dominate at 34%, appealing to cost-conscious buyers.

Globally, the story is electric: China’s dominance—with over 50% electrified sales—highlights Europe’s vulnerability. Affordable Chinese imports are flooding the market, potentially eroding local share if the EU drags its feet.

What’s Next for European Automotive Policy?

The proposal now heads to the European Parliament and Council for debate, with final decisions expected in 2026. Will this balance climate goals with economic realities, or will it spark a backlash?

World Report Press will keep you informed on developments in solid-state batteries, fast-charging tech, and how this affects global competitiveness in the EV revolution.

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