EU Delivers Automotive Support Package — and Signals a Retreat on 2035
The European Commission unveiled its much-anticipated automotive support package on December 16, 2025, including a potential weakening of the 2035 combustion engine phase-out that had automakers and environmental groups watching closely.
The European Commission delivered its long-trailed automotive support package on December 16, 2025 — a package designed to prop up a European auto industry under pressure from slowing EV demand, Chinese competition, and the regulatory burden of transitioning away from internal combustion engines.
The headline move was a potential amendment to the 2035 CO₂ emission targets for new cars and vans. The original 2035 target effectively required 100% zero-emission vehicle sales across the EU. The new package opens the door to plug-in hybrids and vehicles running on e-fuels continuing to sell beyond 2035, provided they meet new emissions criteria — a significant softening of the original ambition.
What the Package Actually Contains
The Commission’s December 16 announcement included several measures:
CO₂ target amendment: The 90% emissions reduction target by 2035 (down from 100%) would allow continued sales of certain combustion-engine and hybrid vehicles. The exact provisions for e-fuels and plug-in hybrids were still to be negotiated with the European Parliament and member states.
New carbon credit framework: The package introduced a system of CO₂ credits for automakers that produce vehicles in Europe, which could help manufacturers offset emissions from higher-emitting models against their zero-emission portfolio.
Accelerated deployment of charging infrastructure: A coordination mechanism to fast-track public charging network buildout, targeting 3.5 million public charging points across the EU by 2030.
Simplified type-approval processes: Reduced bureaucracy for bringing new vehicle models to market within the EU.
Industry Reaction: Relief, With Caveats
European automakers — particularly Volkswagen, Stellantis, and BMW, which had all publicly lobbied for regulatory relief — welcomed the package. The European Automobile Manufacturers’ Association (ACEA) called it “a first important step” toward a more realistic transition timeline.
But environmental groups were scathing. Transport & Environment, a leading European clean transport advocacy group, said the weakened 2035 target would “drain momentum from the EV transition” and hand an advantage to Chinese manufacturers who had already committed to full electrification.
Why the Timing Matters
December 2025 marks a pivotal moment for European EVs. China-based manufacturers including BYD, SAIC, and Geely have been expanding aggressively into European markets with competitively priced EVs. European legacy automakers, still in the early stages of their EV transitions, have argued they need more time to scale profitability before the regulatory rug is pulled from under combustion vehicle sales.
The Commission’s package reflects a political reality: full 2035 electrification was becoming increasingly difficult to defend given softening EV demand, high battery costs, and the competitive threat from Chinese manufacturers who operate at scale that European plants cannot yet match.
The Road Ahead
The December 16 package was the Commission’s opening proposal. Final legislation still needed approval from the European Parliament and member states — a process that could stretch into 2026. The actual details of what vehicles qualify under the new framework, and how the e-fuel exemption would work in practice, remained subjects of intense negotiation.
For now, European automakers got what many of them had asked for: a clearer path to a more gradual EV transition, with a bridge back to combustion technology in the interim.
Following the EU’s evolving EV policy landscape? Motorlinks tracks regulatory shifts as they happen.
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