Is the EU’s Plan to Phase Out Gas, Diesel Vehicles Swerving Off Track?

Germany and Europe’s industrial powerhouse is pressuring European Commission President Ursula von der Leyen to rethink green laws.

A Volkswagen Passat R and a Golf GTI at the tower storage facility of German carmaker Volkswagen's headquarters plant in Wolfsburg, central Germany, on March 11, 2025. Ronny Hartmann/AFP via Getty Images

The European Union’s plan to outlaw the sale of new gas and diesel cars by 2035 is facing increasing political and industry pushback, with senior figures now openly questioning and casting doubt on the measures.

The automotive industry is a cornerstone of the European economy, employing more than 13 million people and contributing about 7 percent of the EU’s gross domestic product. But it faces intense competition from China and the planned transition to electric vehicles (EVs).

The EU legislation requires that all new cars produce zero carbon dioxide (CO2) emissions, effectively banning new vehicles with internal combustion engines (ICE), fueled by gas or diesel, by 2035.

However, what once flew as Europe’s proud green banner is now, to some in the industry, starting to look like a mistake.

‘Germans Are the Key Players’

BMW CEO Oliver Zipse said in an interview with Politico, published on Sept. 5, that the EU’s 2035 combustion engine ban is a “huge mistake.”

“I think we’re doing ourselves a disservice by choosing an almost arbitrary point in the future where we say all industries have to align themselves with it by then,” he said.

In August, Mercedes-Benz CEO Ola Kallenius told the German-language business newspaper Handelsblatt: “We need a reality check. Otherwise, we are heading at full speed against a wall.”

Kaellenius said that instead of setting an end date for new combustion cars, sales of electric vehicles could be boosted with tax incentives and lower electricity prices.

Audi CEO Gernot Dollner told the German business magazine Wirtschaftswoche on Sept. 15 that electric vehicles are “better technology.”

Richard Schenk, political analyst at the conservative think tank MCC Brussels, told The Epoch Times that Germany is the key player in any potential shift and that the country is building pressure on European Commission President Ursula von der Leyen to act.

“Specifically, the Germans are the key players, because if they change their mind, then the entire majorities within the EU are changing,” Schenk said. “The Polish and the Italians are on board anyway, the French are currently still making up their minds, but if the Germans change their minds, most likely they would follow in this case.”

He noted that because the ban is enshrined in EU regulation, the European Commission must act first.

“Ursula von der Leyen is the key player here,” he said.

Visitors at the booth of the German car manufacturer Volkswagen on the opening day of the International Motor Show IAA, in Munich, on Sept. 9, 2025. Tobias Schwarz/AFP via Getty Images

EU Pressure

According to Schenk, von der Leyen is under pressure from within her own EU political family, the European People’s Party Group (EPP), which is the EU Parliament’s largest bloc. He said the affair has dominated German politics in recent weeks.

Manfred Weber, a member of Germany’s Christian Social Union and EPP leader, told The Telegraph earlier this month that the ICE car plan is ideological and the combustion engine still has a future.

“Climate change is a problem. We have to solve it, but this was imposing ideological thinking,” Weber said. “That is what people don’t support. And I never supported it.”

In 2024, the EPP warned that unless the law is revised, “driving will become too expensive for many Europeans” and that Europe “will lose countless jobs in the automotive industry to competitors like China.”

The European Automobile Manufacturers’ Association has also called for CO2 targets to be “adapted to reality,” warning that Europe remains dependent on Asian manufacturers for batteries and faces higher energy costs than rivals.

That divide also runs through the auto industry itself, Schenk said.

“So it’s a civil war within the car industry itself,” he said.

“If you listen to the CEOs of the big car manufacturers directly, they are very clear. Imagine these are huge corporations, and they have built up entire sections for EVs, and obviously, now all these people, these engineers, marketing, whatever, they will fight tooth and nail within the corporation to keep their position.”

‘Tremendous Amount of Investment’

Laura Bowler, senior sustainability manager at engineering and consultancy company Ramboll, who spent most of the first decade of her career working at Ford Motor Co., told The Epoch Times that although the 2035 deadline may be pushed back, a full reversal remains unlikely.

“There’s been a tremendous amount of investment in EVs already. I‘d be shocked if they turned around and just said, ’You don’t have to do it anymore,'” Bowler said.

“That being said, there’s been a general trend over the last year in all things sustainability, a bit of delay and softening of everything.”

She said that she was skeptical of the outcome of the transition if there was “no regulatory support.”

“And by regulatory support, I don’t just mean this shift away from CO2-producing cars by 2035, but I do really mean regulations that are helping to prop up the automotive industry in Europe to compete with China,” Bowler said.

A worker inspects a vehicle's charging system in Hefei, Anhui Province, China, on Jan. 17, 2025. Kevin Frayer/Getty Images

A European Commission spokeswoman told The Epoch Times by email that the “EU is staying the course.”

“But we want to be pragmatic,” she said, noting that the EU has already provided flexibility for reaching the 2025 targets, which are in force.

She noted that on Sept. 12, von der Leyen met with key European car industry leaders and stakeholders for the third Strategic Dialogue on the Future of the European Automotive Industry.

“Stakeholders have suggested a variety of refinements, such as a limited role for certain carbon-neutral fuels or a continued role for some plug-in hybrid vehicles and range extenders,” the commission spokeswoman said.

“The commission will carefully assess all input received, as we prepare the impact assessment for the review of the CO2 standards for cars and vans legislation. In this, the Commission is firmly committed to the principle of technology neutrality.”

In a Sept. 12 post on X, von der Leyen said, “We will combine decarbonisation and technological neutrality.”

‘Canary in the Coal Mine’

Automotive voices beyond Brussels said the policy is backfiring.

Geoff Thompson, a UK car expert who runs the popular YouTube channel “Geoff Buys Cars,” told The Epoch Times that he thinks that the transition to electric cars hasn’t gone “as smoothly as perhaps the manufacturers would have hoped.”

“And now they’re massively backpedaling, because these EVs are not selling at the rate that they need in order for them to maintain their profitability,” Thompson said. “How can they still be pushing ahead with that direction when it clearly isn’t making financial sense?”

He said Volkswagen Group in Germany—which includes brands such as Volkswagen, Audi, Skoda, SEAT, and Bentley—is carrying most of Europe, calling it the “economic powerhouse of the automotive industry.”

He said Volkswagen’s woes are a warning sign.

A fully electric VW ID Buzz is pictured on a production line at a Volkswagen plant in Hanover, Germany, on June 16, 2022. Fabian Bimmer/Reuters

Last year, the group, which is Germany’s largest industrial employer and Europe’s top carmaker by revenue, stated that it was targeting $11 billion in savings.

“That should really be the canary in the coal mine. The electric car thing isn’t working out,” Thompson said.

Reliable Used Diesel Cars

Dan O’Hare, manager at Cox Motor Parts, a supplier of Honda, SEAT, and Volkswagen parts and accessories worldwide, told The Epoch Times by email that the uncertainty creates opportunities for parts suppliers for ICE cars.

“If the ban is softened or overturned, traditional parts will be in demand after 2035,” he said. “But even if the ban stays put, there will still be a demand for aftermarket parts well into the 2040s, as used cars aren’t affected and can still be sold. Millions of existing [gas] and diesel cars will need servicing regardless of what happens to new car sales.”

“At the moment, replacement batteries for 10+ year old EVs are very expensive,” he said. “While future EVs will likely improve and battery costs may fall, right now, decade-old EV owners are facing battery bills worth more than the car. For budget buyers, this makes reliable used diesel cars more attractive.”