‘Now is not the time to change emissions rules’: EV industry urges EU to stay the course

As traditional automakers ask the EU to loosen its CO2 rules, those with a lead in the EV market argue that doing so would make Europe less competitive in the global electrification race.

The European automotive sector is due to meet with EU Commissioner Ursula van der Leyen this Friday (September 12) to discuss its future amid intense competition from China, Trump tariffs, and the accelerating energy transition. 

In the lead-up to the meeting, the Commissioner is receiving mixed messages: in late August, members of the European Association of Automotive Manufacturers (ACEA) wrote a letter calling her to change “rigid car and van CO2 targets for 2030 and 2035” they believe are “simply no longer feasible”.

And now, electric carmakers including Volvo Cars and Polestar are asking for exactly the opposite.

‘The market conditions are there’

According to think tank Transport & Environment (T&E), all but one EU carmaker (Mercedes-Benz, whose CEO signed the first letter) is on track to meet 2025-27 emissions targets. These were eased last May to allow companies to average their performance over three years, instead of having to reduce average car emissions by 15% every year.

The delay has made compliance easier: most carmakers won’t even need to pool their emissions reductions – that is buying credits from overcompliant manufacturers.

“Mercedes-Benz, which holds the presidency of the EU auto lobby ACEA and is the loudest opponent of the EU targets, is the only European car manufacturer that would fail to reach them on its own. It would be 10 gCO2km undercompliant and would need to pay Volvo Cars and Polestar to purchase credits from them in a so-called pooling deal,” T&E predicts.

2 million fewer electric cars on EU roads

While the easing of 2025-27 emissions targets has provided relief to the industry, it will also result in 2 million fewer electric cars being sold over the next two years, the think tank adds. This is because carmakers responded to the delay by increasing the price premium of electric models over combustion cars to 40% in June, up from 30% in early 2025.

This is despite the fact that market conditions have never been better for electrification: Battery costs are set to fall by 27% between 2022 and the end of 2025, and by another 28% by 2027, and charging infrastructure has been deployed on 77% of the EU core highway network.

“OEMs are painting a terrible picture because they want their targets weakened. But the reality is that electric car sales are surging and emissions rules are key to that equation. By sticking to the agreed rules, Europe can give its automotive industry a fighting chance in the global EV race. But weakening the targets could see other manufacturers go the way of Mercedes which is falling behind on electrification and must buy credits from its competitors,” Lucien Mathieu, T&E cars director, said.