Automotive News Europe — 2025-12-10
Automotive Industry
Several European automakers and their suppliers are preparing to give cars with a combustion engine a new lease on life, based on expectations that the European Union will walk back its planned ban of the technology, according to people familiar with the matter.
Parts makers are hearing from automakers that they should be ready to move forward with non-EV models for Europe beyond the EU’s 2035 deadline, the people said, declining to be named because the talks aren’t public.
Carmaker plans take shape years ahead of a model leaving the factory, with billions of euros at stake in mapping out the shift toward cleaner drivetrains.
Mercedes-Benz, Stellantis and BMW are among automakers preparing for vehicles with an engine to be around longer, the people said, adding that the discussions are in the early stages and could change depending on the EU’s finalized rules.
“We have heard from quite a few carmakers that we will need the combustion engine in some form beyond 2035,” including plug-in hybrid and range-extender models, Benjamin Krieger, the secretary general of European supplier association CLEPA, said in an interview without commenting on individual companies. “People aren’t ready yet to buy only battery electric vehicles in 2035.”
Mercedes is “preparing to be able to meet different customer requirements; whether all-electric drive or electrified combustion engine – if required, well into the 2030s inside the European Union and beyond,” the company said. Spokespeople for Stellantis and BMW declined to comment.
An uneven transition to EVs and fierce competition from Chinese rivals led by BYD has left many European automakers grappling with overcapacity. That has prompted the industry and governments including those in Germany and France to push for changes to the EU’s plan to effectively outlaw new sales of vehicles with tailpipe emissions by 2035.
A review of the EU’s existing plans, moved up from 2026 because of the slower-than-expected EV shift, is expected to be unveiled this month.
The move represents an opportunity to “rethink together” European regulation and protect jobs and the environment while keeping cars affordable, Stellantis CEO Antonio Filosa said earlier this month at a Goldman Sachs conference.
Several industry executives have called for making the rules more flexible and allowing sales of hybrids beyond 2035.
Combustion-engine and hybrid cars require different parts than a fully electric vehicle, meaning automakers need to ensure robust supply chains are in place if they want to offer several technologies.
Automakers including Volvo and Porsche have walked back ambitious EV plans, pledging to expand their offering with efficient combustion-engine and hybrid models. The industry is cutting staff and capacity as it contends with high costs and rising competition in its key markets.