While the European Union has approved a ban on the sale of new combustion engine cars from 2035, major European car manufacturers are stepping up their efforts a few months ahead of the review clause scheduled for 2026. Between industrial concerns, economic realities and climate ambitions, consensus still seems a long way off.
Adopted in March 2023 as part of the European Green Deal, the ban on sales of petrol, diesel and hybrid vehicles from 2035 aims to drastically reduce CO₂ emissions from the automotive sector. But with the review clause scheduled for 2026 approaching, criticism is mounting from European manufacturers, including BMW, Mercedes and Stellantis.
‘The targets of a 55% reduction in emissions by 2030 and a ban on sales of combustion engine cars in 2035 are not realistic as defined,’ said Antonio Filosa, the new CEO of Stellantis (Peugeot, Fiat, Jeep), in an interview with Les Échos. He is calling for the introduction of ‘flexibilities’ to avoid industrial collapse, citing in particular the need for CO₂ supercredits for small electric cars, better recognition of hybrids, and conversion incentives.
BMW argues for 2050, Mercedes remains doubtful
BMW is equally critical. Its Chief Financial Officer, Walter Mertel, proposes postponing the deadline to 2050, arguing that the current strategy does not take into account the overall carbon footprint of vehicles, particularly that linked to battery production, which is mainly Asian. ‘We should be moving towards a permanent reduction in CO₂ emissions, not just towards a particular technology,’ he insisted at a press briefing.
The previous week, Ola Källenius, CEO of Mercedes-Benz and president of the ACEA (European Automobile Manufacturers’ Association), described the 2035 target as ‘unachievable’ in a letter to the European Commission. This position reflects growing unease in a sector facing declining sales of electric vehicles, competition from China, US tariffs and falling global profits.
The global automotive market is becoming more regionalised, due to the combined effect of customs barriers and environmental regulations. Against this backdrop, Antonio Filosa acknowledged that Stellantis supports electrification, but questioned ‘the pace and rigidity’ of the transition. He also warned about the struggling light commercial vehicle market and called for a three- to five-year postponement of emission reduction targets for this segment, which is crucial for employment in Europe.
Towards a compromise?
Faced with growing pressure, the European Commission already relaxed certain interim targets in March 2025. Its president, Ursula von der Leyen, is set to open a strategic dialogue with manufacturers in the wake of the Munich Motor Show (IAA). But for Filosa, “we must now move from strategic dialogue to strategic action. And quickly. We must not underestimate the rapid decline of the European automotive industry.”
The 2035 target, while politically symbolic, faces a complex industrial reality. Investment in electric vehicles is massive, but infrastructure, production costs and demand are not always keeping pace. The debate is no longer about ‘if’, but about “how” and, above all, ‘when’. The 2026 review clause could well become the scene of a compromise between ecological ambition and industrial survival.
Electric vehicles are gaining ground in a sluggish market
While the European automotive market is struggling to return to its pre-crisis level, France and Germany, two major automotive markets for the industry, illustrate two contrasting trajectories. Although electric vehicles are gaining ground in both countries, market dynamics remain profoundly divergent.
With a modest 2.18% increase in registrations in August (87,500 units), the French market continues to struggle. Over the first eight months of the year, new car sales fell by 7.14% compared to 2024, despite the rebound in August, which industry professionals considered ‘insignificant’. It should be noted that hybrids now dominate the French market with 50.9% of registrations since January, while combustion engines continue to decline: 21% for petrol (compared to 31% in 2024) and 5% for diesel.
On the electric side, the momentum is being driven by commercial fleets (+57% in August), while the share of private individuals has risen to 19%.
Across the Rhine, the automotive market is in better health, with a 5% increase in registrations in August (207,229 vehicles). According to figures from the Federal Motor Transport Authority (KBA), this is the second consecutive month of growth after a difficult 2024.
The 100% electric (BEV) segment recorded a surge of +45.7% year-on-year, reaching a 19% market share. This growth is part of an ongoing trend, despite the end of government subsidies in 2024. It should be noted, however, that overall registrations since January have fallen by 1.7% year-on-year, a sign that the German car market remains sluggish, weighed down by the crisis among European manufacturers and increased competition from Chinese manufacturers.
Hybrids remain in the majority (39.8%), ahead of combustion engines, which are in sharp decline (-18.2% for petrol, -9.2% for diesel). Volkswagen retains its leading position with an 18.1% market share. At the same time, however, Chinese manufacturer BYD – which has announced that it will start production at its first European factory in Hungary by the end of the year – has increased its sales fivefold, while Tesla has declined by 39.2%.
Despite their differences, France and Germany share the same trend: the rise of electric vehicles. But this transition remains fragile in a declining market.
