EU Weighs Reversing 2035 ICE Ban Amid Slowing EV Demand

The European Commission is preparing to propose a reversal of the European Union’s 2035 ban on new internal combustion engine vehicles, according to statements from senior European lawmakers and German officials. The proposal, expected to be formally presented on Dec. 16, would mark a significant policy shift as global electric vehicle (EV) sales lose momentum and major markets reassess long-term electrification strategies.

Manfred Weber, president, European Parliament’s European People’s Party (EPP), said the Commission will present “a clear proposal to abolish the ban on combustion engines” during a press conference in Heidelberg. He added that the decision should be left to market forces: “It should be left to markets and consumers how climate targets are achieved”, Weber said.

German Chancellor Friedrich Merz said electric mobility would remain the primary pathway but stressed the role of alternative technologies. “Electric mobility remains the main path, but there will be other technologies, such as synthetic fuels, toward carbon neutrality,” he said, adding that this approach would provide manufacturers with “real planning security.”

The European Union approved the phaseout of new internal combustion engine vehicles in early 2023, but political and industrial pressure—particularly from Germany—has intensified amid rising trade tensions and mounting competitive challenges from China. Germany, the bloc’s largest economy and home to its biggest automotive sector, has raised concerns about the impact of rigid electrification mandates on industrial competitiveness.

The forthcoming proposal raises questions about whether interim targets, including the EU’s goal of reducing fleetwide vehicle emissions by 55% by 2030, would remain in place. EU officials have not publicly commented on the status of these benchmarks.

The policy reassessment comes as global EV sales record their slowest growth in more than a year. According to data cited by industry consultancy Benchmark Mineral Intelligence, EV registrations  rose 6% year over year in November to just under 2 million units. China, the world’s largest EV market, posted a 3% increase—its weakest growth since February 2024. In North America, EV registrations fell 42% in November following the expiration of U.S. federal tax credits, marking the region’s first annual decline since 2019.

Europe, by contrast, reported combined EV and plug-in hybrid growth of 36% in November, supported by national incentive programs. Even so, demand trends have not offset political concerns linked to industrial performance, investment certainty and trade exposure.