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The European Commission has proposed replacing the EU’s existing 2035 target of a 100% reduction in CO₂ emissions from new cars and vans with a 90% tailpipe-emissions reduction target, plus compensation for the remaining 10%. The proposal is not an enacted change. Some electric-vehicle startups and investors say the softer target could weaken investment certainty and slow the industry’s growth; those are stakeholder concerns, not established outcomes.
What the Commission proposed for 2035
Regulation (EU) 2023/851 established a 100% emissions-reduction target from 2035 for new passenger cars and vans. On 16 December 2025, the Commission presented a proposal for a 90% reduction in tailpipe emissions, with the remaining 10% to be compensated through Union-made low-carbon steel, e-fuels or biofuels. The Commission says the proposed framework would allow plug-in hybrids, range extenders, mild hybrids and internal-combustion-engine vehicles to continue to play a role beyond 2035. That does not establish what share of future sales any type of vehicle would have. European Commission: CO₂ emission standards for cars and vans
The Commission describes the revision as a proposal, so it should not be treated as the law currently in force. Its policy page identifies the existing 100% target and separately describes the proposed 90% framework. European Commission policy summary
Why startups and investors are concerned
Some companies argue that a firm electrification target helps investors assess demand and gives manufacturers, battery suppliers and charging businesses a clearer reason to commit capital. In a 21 December 2025 report, TechCrunch quoted World Fund partner Craig Douglas warning that Europe could lose leadership without clear, ambitious policy signals. Cariqa CEO Issam Tidjani said greater flexibility could delay scaling and learning curves, potentially costing Europe industrial leadership. These are forecasts and arguments from named stakeholders, not proof that the proposal will produce those effects. TechCrunch’s account of startup and investor responses
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E-Mobility Europe, an industry association, said the lower ambition could damage investment certainty. It reported that more than 200 European business leaders had called for a clear 2035 electrification signal in September 2025; that number and characterization are the association’s account. Its Secretary General, Chris Heron, said: “Changing the rules midway through the game undermines business confidence after companies have already committed capital and built factories around a 100% trajectory.” The statement expresses the association’s advocacy position; it does not establish the proposal’s actual effect on investment. E-Mobility Europe statement, 16 December 2025
Industry views are not all the same
The reported reactions do not amount to a single industry position. TechCrunch reported that Volvo wanted the 2035 direction maintained and called for more charging-infrastructure investment, while some traditional automakers had pressed for more time. It also reported that French battery-cell startup Verkor welcomed the Battery Booster, another part of the Commission’s package. That support for a battery initiative can coexist with objections to changing the emissions standards. TechCrunch report on industry responses
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The market and policy context
The Commission’s figures show a market already changing, while also underscoring that uptake differs by vehicle category. Average emissions from newly registered passenger cars in Europe fell 28% between 2019 and 2024. In 2024, zero-emission vehicles made up 14.5% of new car registrations and 6.4% of new van registrations in the EU, Norway and Iceland. These figures describe the specified periods and geographies; they do not predict future registrations. European Commission data and policy summary
The standards proposal was one element of a wider automotive package, which also included corporate-fleet measures, a battery strategy, administrative changes and vehicle-labelling measures. The Commission announced €1.8 billion for a fully EU-made battery value chain. The battery funding and the emissions proposal are separate package measures, so a company can welcome the former while opposing the latter. European Commission automotive package, 16 December 2025
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What the debate means for investment
The disagreement is about the trade-off between a predictable electrification signal and greater flexibility for automakers. Supporters of a firm target argue that policy consistency helps businesses justify long-term investments in vehicles, batteries and charging. Those favoring more flexibility argue that manufacturers should have additional ways to meet emissions requirements and compete. The sources establish these as competing policy arguments, not a settled forecast of jobs, investment, sales or Europe’s industrial position.
For a personal-finance reader, the distinction matters: a proposed target is not a promise about future vehicle availability, prices or resale values. The proposal’s eventual status and details would need to be known before drawing conclusions about individual purchase decisions. The Commission’s policy page describes the proposed revision; it does not establish a later legislative outcome.
Quick Recap
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