EU Negotiators Reach Agreement to Revise 2035 Car Ban
The absolute ban on selling new petrol and diesel cars in the European Union starting January 1, 2035, no longer exists politically, gazzetta.it reported on October 20, 2026, after negotiators from the European Parliament’s three largest political groups reached an agreement to allow sales of internal combustion engines to continue past that deadline.
The political compromise follows an agreement struck between France and Germany, Milano Finanza reported. Negotiators from the European People’s Party, Socialists and Democrats, and Renew Europe agreed to revise carbon dioxide emission rules for automobiles alongside the Industrial Accelerator Act. The total phase-out target drops from 100 percent to 87.5 percent of 2021 emission levels by 2035. An additional 7.5 percent reduction can be offset through credits linked to low-carbon steel produced within the European Union.
Electric mobility remains the core strategy of European policy, according to statements cited by ANSA from Socialist representatives and Liberal group leader Valérie Hayer. The agreement rests on the dual principles of technological neutrality and climate objective maintenance. Manufacturers secure a limited degree of additional flexibility, while the framework establishes a new category of affordable electric cars carrying supercredits to help offset fleet-wide emissions.
EU Parliament Targets 2027 Vote on Emission Laws
Formal approval by the involved political groups remains pending ahead of committee votes scheduled for Thursday, October 22, Milano Finanza noted. Parliament and the Council of the European Union must subsequently agree on a common text targeting a vote in the spring of 2027. This legislative path will determine whether interim targets such as a 55 percent emission reduction for new cars by 2030 become binding community law.
Automotive association ACEA urged Brussels to finalize the regulatory package within the first months of 2027, warning that ongoing uncertainty hampers capital allocation. Meeting in Brussels on October 14, ACEA members requested that compliance with carbon limits shift from annual checks to a five-year rolling average starting in 2028, eliminating sudden penalty exposure for off years. The association also asked for softened regulatory trajectories for light commercial vehicles, pointing out that vans lag behind passenger cars in electrification schedules.
Industrial Positioning Across European Manufacturing Hubs
Automoto.it reported that manufacturing footprints determine which automakers stand to gain from the proposed rules. The regional preference criteria encompass the 27 EU member states alongside internal market partners as of January 1, 2020, including the United Kingdom, Norway, Switzerland, and Iceland. Production facilities in Morocco and Turkey, utilized extensively by groups like Renault, remain outside this perimeter.
Stellantis maintains an extensive network of assembly plants across Italy, France, Spain, Germany, and Poland, positioning the firm to adapt its product mix across electric, hybrid, and thermal engines. For commercial vans, the agreement sets emission reduction targets at 35 percent by 2030 and 80 percent by 2035. That adjustment addresses requests for manufacturing flexibility voiced by Stellantis executives regarding sites such as the Italian plant in Atessa.
Local Content Rules Exclude Battery Cells from Compliance
Automakers face complex criteria for compliance between 2028 and 2029. Vehicles must be assembled inside the defined European perimeter, and at least 70 percent of component value must originate locally. Battery cells and materials are excluded from this calculation, acknowledging that European gigafactories cannot yet meet regional demand and leaving Chinese supply chains central to electric vehicle production.
Vehicles fueled exclusively by renewable fuels and low-emission biofuels could be registered outside standard emission limits beginning in 2030, with access restricted to advanced e-fuels and biofuels starting in 2033. Recognizing renewable-fuel vehicles as zero-emission models opens pathways for internal combustion engines to remain on the market past the 2035 threshold, provided manufacturer fleet averages meet the adjusted 87.5 percent reduction floor.