EU Decision on Transition to Exclusively Electric Vehicles by 2030 Under Review, Companies Cancel Investments

The plan to ban the sale of new internal combustion engine cars across the European Union by 2035 is unlikely to be realized. Union leaders are now aware of this, and the current President of the European Commission Ursula von der Leyen has confirmed that if she remains at the helm of the EC, she will embark on a review of plans related to electric vehicles. The year 2026 has been set as the decision year, and until then, the state of the car market and fuels will be analyzed, and the progress of e-fuels, which are supposed to replace traditional fuels like gasoline and diesel, will be assessed.

Green Issues

As the European elections approach, many ‘green’ issues are coming into the public eye, as well as the attention of politicians within the Union, and many of these issues are becoming parts of election campaigns. Protests by farmers, who are also protesting against green and import policies, have been ongoing across Europe for some time and have not been well received by any of the leaders, with no end in sight.

According to initial plans, the sale of all new vehicles producing harmful emissions should be banned at the EU level from 2035, meaning that all vehicles should be exclusively electric, whether powered by batteries or hydrogen, which is even further from a completely electric fleet on the roads. These rules were accepted at the EU level last year and include cars and light commercial vehicles. However, many Union countries, including Germany, Italy, and Poland, opposed these rules.

These countries argue that the deadlines for a complete transition to electric vehicles are overly ambitious and that there is an alternative path, which is to introduce an exception for internal combustion engines that would use only synthesized, i.e., e-fuels. Such fuels are, experts say, identical to current fossil fuels but are not derived from fossil sources. Such fuels are currently rare and considerably more expensive than traditional ones due to high production costs and the lack of infrastructure for storing and distributing such fuels. E-fuels should be created or produced from carbon dioxide extracted from the atmosphere, and we know that carbon capture technology is still not the best.

So, although there is still no real substitute for fossil fuels, the complete ban on fossil fuel engines remains in effect, although certain concessions regarding engines burning synthetic fuels will likely be made. This means that internal combustion engines will remain in production even after 2035, but such engines should be powered exclusively by e-fuels after that year, thus gasoline and diesel would go into the dustbin of history. Quite optimistic considering the current state.

Review in 2026.

Although the announcements are optimistic, it seems that even the decision-makers are not convinced by what they are saying, as they have set 2026 as the year for review. They say that in two years they will see if there is progress in the technology of synthetic fuels, while at the same time the automotive industry must prove that such an alternative is feasible. If this happens, the EU will allow the continued production of cars with internal combustion engines, but only if they are powered by synthetic, i.e., e-fuel.

The President of the European Automobile Manufacturers Association (ACEA) and the head of Renault, Luca de Meo, says that the association will not oppose the proposed ban and adds that ‘everything is feasible if the right conditions are provided.’ And the right conditions lately, when it comes to electric vehicles, are state subsidies without which the market would hardly exist.

Mercedes and Apple Withdraw

While Renault’s Luca de Meo is optimistic and compliant, some other manufacturers like Mercedes are slowly abandoning their electric plans. Recently, Mercedes-Benz announced that they are withdrawing from the plan to sell only electric cars by 2030. This news is, as analysts say, the latest evidence that ‘the global automotive industry is becoming increasingly gloomy regarding a fully electric future, especially after the slowdown in sales growth.’

Just three years ago, Mercedes was quite optimistic about plug-in powertrains, stating that it would sell only electric vehicles by 2030. Now it seems that the market does not allow Mercedes to achieve its plans as the drop in electric vehicle sales has been quite significant.

Even in Europe, where the growth of electric vehicle sales outpaces North America, Mercedes does not expect a transition to selling only electric vehicles in the near future, said the company’s CEO Ola Källenius to Reuters.

Tesla has also recorded a drop in sales, and Elon Musk himself says that he expects a significant drop in sales in 2024, while companies that deal exclusively with electric vehicles like Rivian and Lucid have stated that they expect production to remain unchanged this year.

Other companies, such as GM and Ford, have postponed the construction of factories or canceled their new electric models. Additionally, autonomous vehicle manufacturers Cruise and Waymo, owned by Google’s parent company Alphabet, are also struggling to expand their products beyond San Francisco and are facing issues with their ‘unruly’ autonomous vehicles.

The latest withdrawal from electric vehicles has also been announced by Apple. Although Apple has never focused exclusively on mobility, ten years of investment in ‘Project Titan,’ as it was called, has gone to waste, and the company says it will focus all its efforts on artificial intelligence. The decision to close the project was internally announced on Tuesday, Bloomberg and The New York Times reported, citing unnamed sources.

Apple has never publicly disclosed its plans for electric vehicles, despite constant leaks of information from the media over the years. In 2022, the specialized site The Information published a report detailing the problems the project faced, including the departure of several executives due to a lack of leadership support.

Apple will move many employees from the electric vehicle department to generative artificial intelligence (AI) projects, Bloomberg reported.