European dealers could retain a broader mix of combustion, hybrid and electric models beyond 2035 after lawmakers backed a dilution of the EU’s vehicle CO2 targets.
The European Parliament’s environment committee this week voted to replace the existing requirement for a 100% reduction in new car emissions from 2035 with an 87.5% cut.
Manufacturers could gain a further 7.5 percentage points through credits for using low carbon steel produced in the EU, taking the effective requirement to 95%.
The proposal goes further than the European Commission’s previous plan for a 90% reduction supported by credits for low carbon steel and renewable fuels.
Crucially for dealers, the committee text would allow some new combustion engine vehicles to remain available after 2035 rather than imposing an effective end to their sale.
More powertrain choice beyond 2035
If adopted, the changes could extend the production lives of combustion and hybrid models, giving dealers a broader range of vehicles for customers unable or unwilling to switch to fully electric cars.
It could also reduce the danger of manufacturers having to withdraw lower-volume combustion models abruptly as the deadline approaches.
Small electric cars made in the EU would receive additional support under the committee proposal. Models measuring no more than 4.2 metres could count as 1.4 vehicles when manufacturers calculate compliance, while highly efficient EU-made EVs could count as 1.2 vehicles.
These super credits could encourage manufacturers to prioritise smaller and more efficient electric cars, potentially improving the availability of more affordable EVs in European dealerships.
UK dealers face indirect effects
The legislation would not apply directly to UK registrations, but its influence would extend beyond the EU because manufacturers plan model ranges, factories and investment across Europe.
Longer European production runs for combustion and hybrid models could preserve access to those vehicles for UK dealers. Conversely, incentives limited to vehicles and low carbon steel produced in the EU could disadvantage UK-built models sold into the bloc unless Britain secures equivalent treatment.
Changes to corporate fleet policy could also affect the future used car market. Parliamentary committees have supported making proposed zero-emission corporate fleet targets aspirational rather than mandatory. The corporate fleet proposal is a separate legislative file and its committee position is not final.
The full European Parliament is now expected to vote on its negotiating position during its December plenary session.
If approved, Parliament must then negotiate with EU governments through the Council. France and Germany have proposed a different compromise based on a 90% reduction without compensatory credits, meaning the final rules could change substantially.
Dealers and manufacturers therefore gain no immediate regulatory certainty from Wednesday’s committee vote, but it strengthens the prospect that Europe’s post-2035 market will support a wider range of technologies than previously planned.
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