The European Commission has softened its planned 2035 ban on the sale of new petrol and diesel cars. This move, Reuters reports, follows growing pressure from Germany, Italy and an auto industry increasingly at odds with the European Union’s climate timetable.

When the ban was agreed in 2023, it was presented as a historic break with the past. The internal combustion engine (ICE), Europe’s industrial backbone for decades, was to be legislated into obsolescence, replaced by a greener, cleaner future. Manufacturers were expected to electrify at speed, with consumers ditching their petrol and diesel cars. The deadline was final, prompting governments to rush their support for battery plants, charging infrastructure and new supply chains.

That certainty, however, has since been tested. A demand problem has steadily exposed the gap between ambition and market behaviour, as electric vehicle uptake has failed to match the pace assumed when the deadline was set. Battery-electric cars account for roughly 16% of new registrations across the EU, while hybrids now make up more than a third of the market. Petrol and diesel vehicles still represent over 35% of sales.

In response, the Commission is now revising how the 2035 target would be enforced. Under the framework, carmakers would no longer be required to meet a de facto zero-emissions threshold by that date. Instead, they would be asked to cut exhaust emissions by around 90% from 2021 levels, allowing a limited number of non-electric vehicles to remain on sale beyond the deadline. That is, provided remaining emissions are offset through measures such as lower-carbon steel, synthetic e-fuels or advanced biofuels.

From a political standpoint, softening the EU’s 2035 ban on petrol and diesel cars would bring the bloc closer to Donald Trump’s approach to vehicle regulation. The US President has long opposed restrictions on petrol and diesel cars, arguing that they inflate consumer costs and weaken domestic manufacturing. A move in this direction would remove one point of contention with Trump and could move the bloc back into the White House’s good books.

Placed against that backdrop, the policy shift also speaks to a broader erosion of European leverage. Since Russia’s invasion of Ukraine in 2022, energy security has remained volatile and has forced governments to prioritise affordability, industrial resilience and defence spending over long-term climate goals. The war has exposed how dependent Europe remains on legacy energy systems even as it tries to legislate its way beyond them. Meanwhile, the fiscal demands of rearmament and Ukraine support have narrowed the political space for policies that impose visible costs on voters. Aligning more closely with Trump on vehicle regulation is not a mere ideological convergence, but a recognition that Europe’s room for unilateral ambition has shrunk.

While none of this suggests that the EU has abandoned decarbonisation altogether, it points to a continent drifting into regulatory uncertainty on its EV manufacturing. That ambiguity is what Europe’s electric vehicle makers can least afford. Chinese auto manufacturers are expected to take 11% of Western Europe’s EV market this year, up from 3.8% in 2021, with sales projected to peak at around 13% before 2030. For an industry already trailing in scale and cost, uncertainty over Europe’s own rules leaves manufacturers even further behind.