HEADLINE: “Why Europe is rethinking its bold plan to phase out gas cars”, By Chico Harlan

“The European Union’s plan to phase out sales of gas and diesel cars by 2035 could be in trouble.”

Why Europe is rethinking its bold plan to phase out gas cars

The European Union’s plan to phase out sales of gas and diesel cars by 2035 could be in trouble.

Today at 5:00 a.m. CT

Long portraying itself as the world’s climate leader, Europe is facing a fierce backlash against one of its key steps to reduce planet-warming emissions.

Only four years ago, this continent bet on an electric car revolution that it thought could be both environmentally friendly and profitable. The European Union’s political leaders proposed a 2035 ban on new gas and diesel car sales by citing the “generational task” of saving the planet. They said the forward-thinking policy would also put the continent and its automakers at the forefront of innovation.

But the transition is unfolding more chaotically — and with more trade-offs — than Europe had hoped. The continent’s auto industry is cutting jobs and struggling to compete with China, whose companies can produce EVs at a lower cost.

And while some of the blame falls on the boardroom decisions of auto companies, Europe’s right-leaning politicians and car industry lobbyists are increasingly training their ire on the E.U.’s regulation. They say that if Europe sticks to its green automotive target, it risks job losses, closed factories and deepened dependence on Beijing, which dominates the EV supply chain.

“We need flexibility on the 2035 target,” said Jens Gieseke, a German member of the European Parliament with the European People’s Party, the main center-right group. “We don’t want to kill off the industry.”

The pushback is emblematic of a shift in Europe and beyond — from a triumphalist wave of ambitious pledges just a few years ago, to a more fractious debate about how far and how fast climate action can realistically go.

An Audi electric vehicle is manufactured in August last year at the Volkswagen plant in Zwickau, Germany. (Jens Schlueter/AFP/Getty Images)

The car industry is the most emotional aspect of that debate, because it accounts for 7 percent of the E.U.’s gross domestic product and because its automakers — including Volkswagen, Mercedes-Benz, BMW and Renault — are such a famed part of Europe’s identity. But since mid-2021, its five biggest carmakers have seen their combined market value fall from $364 billion to $197 billion. Their pain has intensified recently because of President Donald Trump’s decision to impose 25 percent tariffs on cars coming into the United States.

The 2035 target is under particular scrutiny because of an upcoming E.U. review period that could open the door for changes. Julia Poliscanova, a senior director at the Brussels-based Transport & Environment group, said, “There’s a big risk it will be watered down.” One possibility, she said, would be a revision that allows for the sale of plug-in hybrids beyond 2035. Because those vehicles use both batteries and internal combustion engines, such a move would essentially extend the gasoline age in Europe.

The E.U.’s climate commissioner, Wopke Hoekstra, has vowed to stick with the 2035 plan. But Italian Prime Minister Giorgia Meloni has called the target an example of “ideological madness” and said she’ll work to “correct” it. In the European Parliament, which tilted rightward in last year’s elections, lawmakers during a recent session described the goal as a “disaster” that is out of step with what consumers want.

“[The transition] is not going to plan,” said Sigrid de Vries, director general of the European Automobile Manufacturers’ Association. “The idea that if you simply prescribe rules, it will all happen — it’s just too simply put. That realization is starting to sink in.”

Europe is not the only place where regulation of gasoline cars is up for debate. Last month, Britain slightly loosened its ambitious vehicle rules, enabling hybrid cars to be sold until 2035, rather than 2030. And in the U.S., House lawmakers recently voted to block California from enforcing a rule that would ban the sale of new gasoline-powered vehicles by 2035, putting the plan at the mercy of the Senate and a potential legal battle.

In Europe, left-leaning politicians and advocates for climate goals say European nations should be rapidly rolling out charging stations and introducing more incentives for consumers — steps that make the EV market grow. They agree that automakers are in turmoil. But they say that resisting an inevitable transition will only leave them further behind, both here and in other markets.

“Today, I feel like I’m in the boardroom of Nokia when the iPhone was just released,” Mohammed Chahim, a Dutch member of parliament, said on the floor in March after hearing fellow politicians rail against the plans. “Nostalgia is good … but not if it blocks innovation, not if it blocks change.”

Consumers in the E.U. purchase roughly 10 million cars every year, and in 2024, about 13.6 percent of those vehicles were fully electric. That’s higher than the 9 percent share in 2021, the year the target was proposed. But Europe’s current goal depends on EV sales eventually skyrocketing, not merely nudging up, by appealing to all kinds of consumers. One of the main obstacles so far for faster growth? The cost.

The average European EV sells for 46,000 euros, or $52,000.

Even companies that started planning for the transition years ago have faced difficulties in producing more affordable models. Europe’s legacy carmakers needed to transform huge, existing operations. That has meant reconfiguring factories, retraining workers, losing decades of optimization and in many cases buying batteries — the most expensive component — from elsewhere. Given these obstacles, Europe’s carmakers have tried to pad their profits by sticking with gas models — which have higher margins — and emphasizing premium-model EVs.

But that strategy has put them in a bind.

Volkswagen ID. Buzz electric vans wait in December 2024 to be delivered to a commercial plant in Hanover, Germany. (Ronny Hartmann/AFP/Getty Images)

That’s because affordable EVs are already being widely produced — just not by them. Armed with battery expertise, state subsidies and a hammerlock on crucial minerals, China has emerged as the auto world’s new superpower. Its upstart carmakers have taken over the Chinese domestic market — which Volkswagen used to dominate — eating into Europe’s automaking profits. And though Chinese brands, like BYD, have been slower to make inroads in Europe, they are opening factories there.

The Volkswagen Group, Europe’s biggest automaker, had the best chance to be far ahead, experts say. After its mid-2010s Dieselgate scandal, in which the company falsified polluting levels of its diesel cars, the company was desperate for an image remake — and it hired a CEO, Herbert Diess, who called for an “electric offensive.”

But the software the company designed for its vehicles proved clunky, delaying model launches and drawing complaints from consumers. Ambitious plans to make batteries in Europe had to be downscaled. Diess was replaced in 2022 as CEO, and last year the company — which includes brands like Porsche and Audi — said it would need to cut 35,000 jobs by 2030.

The company still says the “future of mobility is electric” — and its namesake brand touted recently announced plans for a new “entry-level” EV model that will debut in 2027, priced around 20,000 euros.

But the company’s new CEO, Oliver Blume, said in a recent interview with a German newspaper that any decision about a combustion engine ban should be “based on the realities of how quickly e-mobility is spreading.”

“And if necessary,” he said, “it needs politically flexible transition periods.”

Michael Bloss, a Green Party member of parliament from Germany, said Europe’s carmakers “are not as clear in their strategy as they were three years ago.” Their muddled approach, coupled with the “cultural war against electric cars,” has created wider uncertainty — both for consumers who might think twice about an EV and for the investors who are crucial in building up Europe’s supply chain.

“Normally, you’d need the political sphere to give more certainty to the markets,” Bloss said. “But now from the political sphere there is insecurity.”

This year, two Chinese companies, CATL and BYD, have caught the attention of the industry with new battery-charging technology that would make recharging an EV nearly as fast as filling a gas car at the station. Europe, meanwhile, has been struggling with its attempt to make batteries domestically: A well-funded Swedish venture, Northvolt, filed for bankruptcy in March. Another European effort called ACC — a joint venture between Stellantis and Mercedes-Benz, among others — is ramping up production at its first gigafactory, in France. But it has also paused plans for other factories in Italy and Germany.

De Vries, from the automobile manufacturers association, said that Europe needs a “kind of master plan” to make the transition less rocky. The E.U. in March unveiled a set of steps aimed to help, including more funding for battery efforts. The E.U. also proposed providing some extra leeway for companies, allowing them three years instead of one to meet carbon emissions targets, averaging their fleet-wide performance from 2025 to 2027.

Ursula von der Leyen, the president of the European Commission, said the goal is “to secure the future of the car industry in Europe without any question.”

“We cannot let EVs become more expensive,” she said. “But we also cannot afford to create new barriers.

BOTTOMLINE: The E.U. in March unveiled a set of steps aimed to help, including more funding for battery efforts. The E.U. also proposed providing some extra leeway for companies, allowing them three years instead of one to meet carbon emissions targets, averaging their fleet-wide performance from 2025 to 2027.