The European Commission proposed rolling back its 2035 ban on sales of new petrol cars to a technology‑neutral 90% fleet CO₂ reduction by 2035, while relaxing the 2030 target to 2032 and lowering the commercial reduction target to 40% (from 50%); the draft includes provisions for green steel, e‑fuels, small‑car credits and leaves room for accounting changes such as PHEV capacity factors. The shift, driven by automaker lobbying and some member states, reduces regulatory certainty and creates avenues to weaken real‑world emissions outcomes, advantaging fast‑moving Chinese EV exporters and startups while increasing competitive pressure and strategic risk for incumbent European OEMs. For investors, the move raises policy and execution risk for automotive supply chains and commodity demand (batteries versus synthetic fuel infrastructure), but because a 90% target still implies heavy electrification the ultimate winners will depend on how implementation and emissions accounting are finalized.
The European Commission has proposed replacing its 2035 ban on new petrol car sales with a technology-neutral 90% fleet CO₂ reduction by 2035, while delaying the 55% 2030 objective to 2032 and cutting the commercial reduction target to 40% (from 50%). The draft also contemplates domestic “green steel” rules, credits for small domestically produced EVs, allowance for e‑fuels and revised PHEV capacity factors, and remains subject to approval by EU governments and the European Parliament. The immediate effect is reduced regulatory certainty for incumbent OEMs and suppliers: the rollback creates avenues to undercount real-world emissions and to justify continued ICE production, which benefits PHEV and e‑fuel pathways that lack scale and would require expensive new infrastructure. The article cites growing competitive pressure from Chinese EVs — European imports have doubled year-over-year — and notes region share data (Europe and California low/mid-20s% EVs in 2025, US ~10%), implying accelerating market share gains for fast-moving Chinese and startup EV makers while legacy brands face strategic and execution risk. Key risks are policy dilution (PHEV accounting, e‑fuel credits), diversion of capex from battery electrification to synthetic fuel or green‑steel projects, and reputational/regulatory fallout that could prompt further rollbacks. Investors should watch final regulatory text, EU parliamentary negotiations, PHEV capacity‑factor decisions, monthly EV share and Chinese import flows as triggers for material re‑rating across OEMs, suppliers and commodity chains.
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