European Union Softens 2035 Tailpipe Target, Leaving Room for Combustion Engines

The European Parliament's Environment Committee has voted to reduce its proposed 2035 fleet CO2 reduction mandate from 100% to 87.5%, opening the door for automakers to continue selling combustion-engine vehicles. The revised proposal also grants zero-emission status to vehicles fueled exclusively by biofuels and introduces super-credits for compact, European-built electric vehicles. While industry groups welcomed the added flexibility, trade bodies and legacy automakers continue to lobby for further concessions amid challenging electric vehicle margins.