The 2035 Ban on Internal Combustion Engines Wavers Under German Pressure

Brussels Yields to German Pressure

On Wednesday, November 26, Stéphane Séjourné, Vice President of the European Commission, indicated that the European institution might reconsider the ban on combustion engines set for 2035. During an automotive summit, he stated that Europe is prepared to use all tools at its disposal to save the European automotive industry. He mentioned the possibility of adapting the path toward the energy transition by granting flexibilities, even suggesting that some technologies might be permitted post-2035 to provide clear guidance for consumers.

This openness comes under pressure from German Chancellor Friedrich Merz, who plans to send a letter to the Commission requesting a postponement or relaxation of this deadline. Germany justifies its stance by citing massive job losses in the German automotive sector, estimated at over 50,000 jobs lost in a year according to EY, out of a total of around 800,000. The sector is also struggling due to the erosion of its competitiveness in the face of increasing Chinese competition in the electric segment, high energy costs since the Russian invasion of Ukraine, declining global demand, and the 15% US tariffs on European cars.

France Stays the Course Despite Calls for Delay

Unlike Germany, France remains supportive of adhering to the 2035 timeline. In October, Emmanuel Macron reaffirmed that this goal was beneficial as it aligned all stakeholders towards the same horizon, encouraged changes in practices, and lent credibility to the investments made. However, the French President acknowledged that this ban should not be enforced in a completely blind manner, suggesting some openness to flexibility.

This French position is backed by Spain and several players in the automotive sector like Volvo and Polestar, as well as battery manufacturers and charging operators. For France, delaying the objectives would call into question the massive investments already made in new factories and production infrastructure. The stakes are also significant for Paris in terms of employment, given that the French automotive industry accounts for around 800,000 jobs, with 350,000 in manufacturing and 450,000 in equipment supply, according to parliamentary data.

December Announcements Will Set Europe's Course

The European Commission is set to announce specific measures on December 10 to alleviate the burden on European automotive industry companies. This pivotal date will be crucial in determining whether the European Union is truly changing course or merely making marginal adjustments. Friedrich Merz has promised an official agreement for Thursday within his German government coalition formed with the SPD, expressing a united front before sending his letter to Brussels. Stéphane Séjourné has refrained from revealing more details before this critical announcement, creating an atmosphere of anticipation in the sector. The stakes are high, as a revision of the 2035 target would directly impact European manufacturers' investment strategies, industrial conversion plans, and the ongoing deployment of charging infrastructure. The resolution proposal submitted to the French National Assembly on November 25, aimed at revisiting this ban, indicates that the debate is also intensifying at the national level.