Brussels is set to ban the sale of new cars with internal combustion engines by 2035, a move that BMW CEO Oliver Zipse warns could significantly impact the European automotive industry.

This ban is part of the EU's broader climate neutrality goals, which include a zero-emission vehicle requirement approved in March 2023.

Last year, EU member states endorsed regulations to phase out new carbon dioxide-emitting vehicles by 2035, aiming for substantial CO2 reductions by 2030.

In light of these regulations, major car manufacturers like BMW, VW, and Renault are seeking leniency on CO2 targets due to fears of hefty fines stemming from lower-than-expected electric vehicle sales.

The transition to electric vehicles is fraught with challenges, including a potential 'massive shrinking' of the European auto industry as subsidies dwindle and competition from low-cost Chinese manufacturers intensifies.

While Europe excels in alternative fuels like e-fuels and hydrogen fuel cell cars, it is currently lagging behind China in the development of affordable electric vehicles and battery technology.

To support the shift from traditional engines, governments are working on expanding charging infrastructure, although the market has faced setbacks, including a nearly 44% drop in EV registrations in August compared to the previous year.

Mahle GmbH, a major automotive supplier, reported record revenue last year, suggesting that some companies may find ways to thrive despite the industry's challenges.

Zipse has emphasized the need for a new regulatory framework to foster competitiveness and address the pessimistic mood surrounding the 2035 deadline.

Arnd Franz, CEO of Mahle, has called for a rapid shift in European climate policy to prevent severe consequences for the automotive sector, warning that strict CO2 targets could harm competitiveness.

As new CO2 emission targets are set to become stricter next year, automakers will be pressured to increase electric vehicle sales amidst a declining market and fierce competition.

Brussels has also introduced tariffs on Chinese electric cars, which complicates the situation for European consumers while limiting the sale of thermal vehicles.