According to research from Transport & Environment (T&E), recent proposals by the European Commission to relax auto electrification goals could severely impact the industry and climate.

Initially set for a total ban on fossil-fuel cars by 2035, the policy was adjusted in December 2025. The new proposal lowers the 2035 tailpipe emissions reduction target from 100% to 90%. Carmakers may cover the 10% gap using EU-produced low-carbon steel or sustainable fuels such as e-fuels and biofuels.

T&E warns this proposal could reduce the 2035 battery electric vehicle (BEV) market share to 85% and cause BEV sales to fall by 50-95% due to policy uncertainty. Furthermore, total CO2 emissions could rise by 720 million tons (MtCO2e) between 2025 and 2050, equivalent to eight years of German vehicle emissions, potentially rewarding laggards while hindering competition against Chinese rivals.