Will there be a change of course regarding the EU ban on combustion engines from 2035 onwards?

The debate surrounding the planned sales ban on new vehicles with combustion engines within the European Union, starting in 2035, is currently heating up politics, industry, and the public. Following a recent letter from German Chancellor Friedrich Merz to the EU Commission, EU Transport Commissioner Apostolos Tzitzikostas has indicated he is “open to all technologies”—a move that appears to signal a possible shift in the debate.

But what does this mean specifically for the ban on combustion engines? For the automotive industry in the EU—manufacturers, suppliers, dealers, and service providers—the coming months could be pivotal. I analyze which scenarios are conceivable, what is crucial, and what the consequences of a potential change of course would be.

Why the ban is in question

• Industrial and labor market pressures

The decision to phase out combustion engines entirely after 2035 comes at a time when the automotive industry is undergoing a major transformation. Many manufacturers and especially suppliers have made significant investments in e-mobility—but at the same time, they fear job losses and uncertainty if the transition happens too quickly. With its strong automotive and supplier industries, Germany is among the countries that have been issuing the most vocal warnings.

• Demand for technological neutrality

In his letter to the EU Commission, Merz demanded that, in addition to battery-electric vehicles, “highly efficient combustion engines,” plug-in hybrids, and vehicles with future drive technologies should also remain permitted – in order to safeguard jobs and competitiveness.
Tzitzikostas signaled his willingness to consider “all technological developments” in the upcoming legislative package – including alternative drive systems, e-fuels, and low-emission combustion engines.

• Political backing and EU revision

With the official letter from Berlin and the emerging support from other member states, pressure is mounting on EU institutions to reconsider the ban or make it more flexible. The legislative process for 2035 is therefore to be reopened – with the prospect of changes.

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Obstacles and arguments for maintaining the ban

Despite growing resistance, there are compelling reasons against a relaxation of the rules:

• Climate targets and CO₂ neutrality : The ban on combustion engines is part of the EU strategy to make the transport sector climate-neutral. Reversing this ban could undermine confidence in the transition in the long term.

• Investment and infrastructure needs : The switch to e-mobility requires further expansion of charging infrastructure, expansion of the electricity grid, battery and recycling capacities — the longer one hesitates, the more expensive and complex the change will become.

• Market development & competitiveness : Manufacturers, suppliers and consumers have long since begun to adapt to electric vehicles — a reversal could create market uncertainty and favor international competitors who consistently focus on electric vehicles.

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Possible scenarios

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Importance for manufacturers, suppliers & markets

• Manufacturers : If the ban remains in place, entire production and supply chains will need to be restructured. Flexibility keeps options open, but also risks planning uncertainty.

• Suppliers : Suppliers of conventional combustion engines need to rethink their strategies — potential lies in electric components, software, batteries, and modern drive technology. A technology-neutral approach can provide short-term relief, but in the medium term, it will increase the pressure to invest in future technologies.

• Markets & Consumers : Opening up could provide broad purchasing options. However: Without massive infrastructure development, transitional problems are likely.

Our assessment: Will there be a real turning point?

Yes — at least the probability of a deviation from the strict plan so far is increasing.

The pressure from industry, the concern about jobs, and the desire for technological neutrality are real. The EU Commission seems prepared to at least examine this demand; initial signals from politically strong member states like Germany are increasing the momentum.

Whether there will ultimately be a complete reversal — or merely flexibilization (e.g. for hybrids, e-fuels, plug-in systems) — depends on how convincingly the Commission wants to achieve its climate and economic goals simultaneously.

For manufacturers and suppliers, this means: Now is the time for planning. Those who focus early on electrification, diversification, and future technologies can gain an advantage. Those who rely on combustion engines risk competitiveness and market share in the medium term.

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What does this mean for the automotive industry in the EU – and for your company?

In the event of a potential shift or increased flexibility, companies in the automotive industry should:

• rethink their investment strategy and run through scenarios (electric drive, hybrid, e-fuels)

• Aligning supply networks with new technologies

• Review strategic partnerships with suppliers and service providers

• Reassessing market forecasts and location decisions

As a consulting firm specializing in the automotive sector (e.g., with market analyses, business plans, scenario planning), there could be a significant demand right now. Companies need guidance to successfully manage this transformation.