The EU Has Officially Dropped The 2035 Gas Car Ban

Hybrids and plug-in hybrids will continue to be offered past 2035, but there’s a big box that needs to be ticked for that to happen.

Ford Explorer EV production in Cologne, Germany

Iulian Dnistran

By: Iulian Dnistran

Dec 17, 2025 at 3:11am ET

Add InsideEVs as a preferred source in Google

Comment

The European Union has dropped its controversial gas car ban that was supposed to go into effect in 2035.
Automakers now need to lower their fleet emissions by 90% in 2035 compared to 2021 levels, not 100%.
This leaves the door open for traditional combustion cars, mild hybrids, full hybrids and plug-in hybrids. E-fuels and biofuels are also a big part of the discussion.

The European Union’s (EU) proposed gas car ban, which was intended to go into effect in 2035, is off the table. Instead, a slightly watered-down version was announced yesterday by the European Commission, the EU’s main executive body, alongside a pledge to offer nearly $1.8 billion (€1.5 billion) in interest-free loans to boost EU-made battery cells.

Under the new rules, which need to be approved by the European Parliament and Council of Europe next year, carmakers selling new passenger vehicles in the EU will have to comply with a 90% reduction in tailpipe emissions compared to 2021 levels, whereas the original proposal imposed a 100% reduction, which effectively banned combustion-powered cars.

Volvo EX30 production in Belgium

Photo by: Volvo

Stay informed with our newsletter every weekday

back

Subscribe For more info, read our Privacy Policy & Terms of Use.

The remaining 10% of emissions will need to be compensated for by using EU-made low-carbon steel in the vehicles’ construction process or by using sustainable fuels like e-fuels and biofuels.

At first glance, it’s a major concession made by the EU’s executive body after intense lobbying from automakers, but in reality, companies will still have to put a lot of effort into selling as many zero-emissions vehicles as possible a decade from now.

In practice, this means that a company like Volkswagen, which had average carbon dioxide emissions of 118.5 grams/kilometer in 2021 over its entire passenger fleet, will have to lower that number to just 11.85 g CO2/km in 2035. That’s impossible to achieve just by selling gasoline- and diesel-powered cars, so hybrids, plug-in hybrids, extended-range electric vehicles (EREVs) and battery electric vehicles (BEVs) will have to play a major role in the next years.

That said, it’s worth noting that these emissions figures are based on the WLTP standard, which is known to produce skewed results, especially when it comes to PHEVs. A discussion about amending the testing procedure to include a more realistic calculation was started a few months ago, but no changes have been made so far.

Xpeng European EV production at Magna Steyr's facility in Graz, Austria

The European Commission said member states will have access to public funds for zero- and low-emissions vehicles only if they're made in the EU. But Chinese companies like Xpeng are already manufacturing vehicles in the EU.

Photo by: Xpeng

Some critics have argued that watering down the 2035 emissions ban will open the floodgates to Chinese-made hybrids and plug-in hybrids. In reality, Chinese automakers already have a foothold in the European Union, offering both EVs and PHEVs. Some companies, like Xpeng and GAC, are even assembling vehicles in the EU, with more to follow.

But there’s good news. To help ease the transition to a cleaner automotive industry, the European Commission also announced a $2.1 billion (€1.8 billion) Battery Booster strategy meant to help create an EU-based battery value chain, with $1.8 billion (€1.5 billion) reserved for interest-free loans for battery-making facilities.

What do you think?

View

Comments

What’s more, the Commission said it would cut the red tape, allowing automakers to access EU-wide incentives more easily. A new category for Small Affordable Cars has also been created, covering electric vehicles that are less than 165 inches (4.2 meters) long. According to the EU’s executive arm, this new category will allow member states and local authorities to develop targeted incentives, which should boost demand for small EVs made exclusively in the European Union.

When it comes to vans, the 2030 CO2 target reduction has been lowered from 50% to 40%. However, the EU’s member states will need to make sure that a specific share of new corporate cars and vans registered in their territories are zero- or low-emissions starting in 2030. Mandatory national targets will need to be imposed, but national authorities will have full flexibility to choose the best way to achieve the targets. To benefit from EU funds, the vehicles will need to be made in the EU.