Combustion-Engine Phase-Out: Electric Car Boom Makes CO₂ Targets Achievable

The EU’s upcoming rules limit the average CO₂ emissions of new cars sold in Europe. Electric cars help lower that fleet average because they do not produce tailpipe emissions while driving. A strong shift toward electric models could therefore help manufacturers stay below the required limits.

Transport and Environment calculated the needed sales growth for major German brands. BMW would have to increase European electric-car sales by at least 14% each year from today’s level. Mercedes-Benz would need 20%, and Volkswagen 24%. These increases would steadily change the mix of cars each company sells.

The target may be difficult, but recent growth makes it possible. EU electric-car sales rose 30% last year and another 45% from January through August this year. Expensive fuel and purchase subsidies are supporting demand. If that momentum continues, the companies could meet the limits despite earlier doubts.

Fleet CO₂ limits are rules for the average emissions of new cars registered in the European Union. They do not describe just one model. Instead, they assess the combined fleet that a manufacturer sells. This matters because cleaner cars can reduce the average created by more polluting models.

Electric cars are central to meeting the limits because they produce no greenhouse-gas emissions while driving at the vehicle itself. Selling more of them can pull a company’s average downward. The article focuses on the targets that apply from 2030 and the stricter requirement planned for 2035.

The limits are important because exceeding them can bring financial penalties. The EU institutions adopted ambitious rules four years ago. The 2035 provision says newly registered cars must emit no greenhouse gases, which would practically end the sale of new combustion-engine cars. The 2030 targets are intermediate steps toward that change.

Transport and Environment estimated how quickly the three German manufacturers must expand electric-car sales to meet the EU’s 2030 limits. The figures start from each company’s current level and apply to annual sales growth in Europe. They show that the required expansion differs substantially between brands.

BMW would need to raise electric-car sales by at least 14% each year. Mercedes-Benz would need 20%, while Volkswagen would need 24%. The comparison is striking because the overall EU electric-car market grew 30% last year and another 45% between January and August this year compared with the same period previously.

Recent market growth therefore exceeds the annual rates calculated for all three companies. That does not guarantee compliance, since each brand starts from a different sales level and has its own fleet mix. Still, continued momentum could make the 2030 targets achievable, even though the industry had expected or requested more flexibility.

The EU’s CO₂ rules are binding limits for new cars registered in the bloc. If manufacturers fail to meet them, they face penalties. This financial risk gives companies a strong reason to increase sales of electric vehicles and reduce the average emissions of their new-car fleets.

The most important deadline is 2035. The rules say that new cars registered in the EU must emit no greenhouse gases from that year onward. Since conventional gasoline and diesel cars emit greenhouse gases while operating, this requirement would practically create a phaseout of new combustion-engine cars.

The 2030 rules are intermediate targets on the way to that deadline. Their final form is still part of a political debate. The European Commission has proposed giving manufacturers more flexibility, while the European Parliament and member states are due to decide later this year. Until then, continued electric-car growth could help companies comply with the existing direction.

The 2030 CO₂ targets are being decided through EU institutions. The European Commission has already proposed making the requirements easier for car companies. The European Parliament and the member states still need to decide whether to accept that approach or retain the existing direction.

The auto industry has spent recent years asking for the limits to be loosened. Manufacturers argue for more room as they manage the expensive shift from combustion engines to electric vehicles. Their request comes while the industry faces weak demand in China, high US import tariffs, and large cost pressures.

The decision is expected later this year, according to the article. At the same time, new evidence suggests the targets might be reachable without major changes. EU electric-car sales grew strongly, and the required annual growth rates for BMW, Mercedes-Benz, and Volkswagen are below that recent market pace. The political debate therefore continues alongside a changing market.

The article identifies two immediate reasons for rapid electric-car growth in the EU. Expensive fuel makes electric driving more attractive to buyers. Government subsidies for electric-car purchases provide another incentive. Together, these forces helped the market grow 30% last year and 45% in the first eight months of this year.

Manufacturers face a different calculation. They currently tend to earn higher profit margins from combustion-engine vehicles than from electric cars. Even when electric models sell well, they can therefore contribute less profit per vehicle. Moving production and sales toward them may help meet climate rules but can weaken earnings in the short term.

That tension is unfolding during a wider industry crisis. US import tariffs are hurting the sector, European cars are less popular in China, and companies are cutting thousands of jobs to reduce costs. Strong electric-car demand could support compliance, but it does not remove the commercial pressure facing automakers.

Electric cars generally produce fewer greenhouse-gas emissions while being driven because an electric motor does not burn gasoline or diesel inside the vehicle. It has no exhaust pipe releasing carbon dioxide during journeys. This is why replacing combustion-engine cars with electric models can lower the emissions average of new-car fleets.

A gasoline or diesel car burns fuel in an engine. That chemical process produces carbon dioxide and other exhaust emissions, which leave the vehicle through its tailpipe. An electric car instead uses stored electricity to power its motor. The vehicle itself therefore produces no tailpipe greenhouse-gas emissions while moving.

The article does not explain this mechanism in detail, but it relies on the distinction in describing the EU’s 2035 rule. The rule requires newly registered cars to emit no greenhouse gases, which would practically end new combustion-engine sales. Total lifecycle emissions can also depend on how electricity is generated, but that issue is not discussed in the article.