EU Vows 'Flexibility' for Embattled Auto Sector

Faced with complaints from Europe's top automakers that the ban will add to their woes as the electric transition is moving more slowly than expected, the EU agreed in September to fast-track a review of the policy.

The bloc is expected to announce relief measures for the region's auto sector, also hit hard by high costs and fierce Chinese competition, next month.

Speaking at an auto industry event in the German city of Stuttgart, EU industry chief Stephane Sejourne said, "Europe is ready to activate all levers to make the European automotive industry successful."

"We want to support the direction that has been taken but adapt the path by allowing for flexibility," he added, speaking alongside German Chancellor Friedrich Merz.

He said there were a "number of technologies" that could still be used in cars after 2035, and also that steps should be taken to "reduce the administrative burden and bureaucracy and make our industry more competitive." 

Some carmakers and governments have called for the EU to take a more pragmatic approach by allowing continued use of some technologies — such as plug-in hybrids and combustion engines that run on sustainable fuels — after 2035.

Germany's auto titans Volkswagen, BMW, and Mercedes-Benz and their many suppliers have seen profits and sales plummet in recent years due to a troubled EV shift and rising competition from new players, particularly in China.

Merz, who has repeatedly spoken out against the ban, said that a "tremendous effort" was needed to face up to the challenge of the rapid changes in the auto industry.

"But these efforts will only be successful if the (European) Commission and then the European institutions as a whole... set the right course in the coming days and weeks."

Merz's own coalition, consisting of his center-right CDU/CSU bloc and center-left SPD party, had been divided over what approach to take.

But the chancellor said the coalition was set to formally agree on the matter on Nov. 27, after which Berlin would communicate the government's "united position" to the EU.