Technology Neutrality Is Not the Answer to Europe’s Car Industry Challenges, Warns CleanTechnica
December 8, 2025
As the European Union stands on the brink of a pivotal decision regarding its automotive future, a growing chorus from environmental advocates and industry analysts is urging policymakers to maintain the ambitious 2035 electrification target rather than adopting a so-called “technology neutral” approach. CleanTechnica reports that Transport & Environment (T&E), a leading environmental organization, warns that compromising on this target could jeopardize Europe’s position in the global electric vehicle (EV) market and undermine decades of investments in clean transport technologies.
The EU’s Upcoming Announcement: A Make-or-Break Moment
Next week, the EU is set to announce revisions to the car CO₂ emissions regulations, with particular focus on the 2035 target that mandates the phase-out of internal combustion engine vehicles in favor of zero-emission alternatives. This decision will signal whether Europe intends to compete head-to-head with manufacturing giants like China and the United States or concede that the continent’s automotive future lies elsewhere.
The current debate centers on “technology neutrality” — a proposed approach that would allow the continued sale of combustion engine cars using alternatives such as biofuels or plug-in hybrid electric vehicles (PHEVs) beyond 2035. While this proposal has found support among certain automakers and political allies, CleanTechnica highlights that it represents merely a short-term fix with potentially devastating long-term consequences.
Misdiagnosing the Industry’s Crisis
Contrary to the automotive industry’s narrative blaming regulatory pressures and electrification targets for sales drops, the real causes lie elsewhere. Recent data reveals that Europe sold three million fewer cars in 2025 than in 2019, with a notable shift in strategy by manufacturers focusing on increasing profitability rather than sales volume. Mass-market vehicle prices soared by 40% between 2018 and 2024, rising from €22,000 to over €30,700 on average. Concurrently, many manufacturers posted record profits.
This pricing strategy has priced many Europeans out of the new car market. Meanwhile, European brands are rapidly losing ground in China, where fierce competition from local EV manufacturers is eroding both sales and profit margins.
Why “Technology Neutrality” is a Risky Path
T&E outlines three critical reasons that maintaining technology neutrality in car CO₂ legislation could be detrimental:
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Targets Guide Investment: Firm regulatory targets provide clarity and confidence for investors. Weakening the 2035 target risks undercutting billions of euros already committed to developing EV technologies such as batteries, charging infrastructure, and electric powertrain components. Over 200 CEOs and industry leaders have appealed to the European Commission not to dilute existing goals.
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Technology Neutrality Undermines Affordability: Although EVs are rapidly becoming the most economical option to buy and operate, alternatives like plug-in hybrids and synthetic fuels come with significantly higher costs. PHEVs typically retail around €55,000 and impose additional fuel costs on used vehicle owners. Synthetic and advanced biofuels remain prohibitively expensive due to scarcity and production costs.
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Global Race Toward Electrification Cannot Be Slowed: Worldwide, the shift to electric mobility is accelerating. Markets such as China, Thailand, and Vietnam are experiencing booming EV sales that now surpass those in Europe. Even within Europe, several countries set new EV sales records in the third quarter of 2025 alone. Hesitancy or backtracking risks ceding ground to faster-moving competitors.
Europe’s Crossroads: Leadership or Lost Opportunity?
The European car industry, which was initially slow to respond to China’s rapid EV advancements, faces a crucial juncture. Embracing the 2035 electrification goal positions Europe to become a global leader in zero-emission vehicles. Conversely, relaxing standards and clinging to combustion-based technologies could consign Europe to the sidelines of the next industrial revolution.
Delaying the transition will not slow China’s electrification momentum. Nor will it sustain European consumers’ interest in outdated technology. The longer the hesitation, the greater the risk that Europe misses out on the substantial industrial, economic, and social benefits tied to clean mobility.
Conclusion: Staying the Course for a Sustainable Future
Lucien Mathieu, Director of Cars at Transport & Environment, encapsulates the stakes: “This is the moment to stay the course and for decision-makers to show leadership and vision. All these discussions on biofuels, e-fuels, hybrids, and ‘efficient’ combustion vehicles are distractions that risk turning the EU into a car museum. Instead, Europe should give its industry every chance to catch up on the technology of the future.”
As the EU’s announcement approaches, the call from CleanTechnica and T&E is clear—technology neutrality is not the solution. Real competitiveness and sustainability lie in accelerating Europe’s commitment to electric vehicles and the transformative industrial shift ahead.
About Transport & Environment (T&E):
With over 30 years of experience shaping Europe’s environmental laws, T&E advocates for zero-emission mobility that is affordable and minimizes impacts on health and the climate.
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