Europe's Softer EV Stance: Why Electric Startups Fear Lost Momentum

The European Commission’s recent retreat from its ambitious 2035 combustion engine ban has sent mixed signals through the continent’s EV ecosystem. Rather than demanding 100% zero-emission vehicle sales by that date, the revised framework permits 10% of new cars to be hybrids or other low-emission vehicles—provided manufacturers offset their carbon footprint. While traditional automakers breathed a sigh of relief, the shift has deepened divisions between legacy car producers and the entrepreneurial EV sector pushing for stricter timelines.

The Policy Pivot and Its Discontents

The European Commission framed this “Automotive Package” as a pragmatic move to bolster European competitiveness while keeping the industry competitive. At 6.1% of total EU employment, the traditional automotive sector carries considerable political weight. Yet the concession has sparked frustration among those who believe Europe is surrendering its chance to lead the global EV revolution.

Craig Douglas, a partner at World Fund—a climate-focused European venture capital firm—voiced the concern that motivated numerous startup leaders to sign “Take Charge Europe,” an open letter circulated in September. “China already dominates EV manufacturing,” Douglas explained. “If Europe doesn’t compete with clear, ambitious policy signals, it will lose leadership of another globally important industry — and all the economic benefits that come with it.”

The letter’s signatories represented a cross-section of the clean energy ecosystem: from mobility companies like Cabify and Einride to energy giants like EDF and Iberdrola. Their collective plea urged Commission President Ursula von der Leyen to “stand firm” on the original 2035 target. But startup enthusiasm couldn’t outweigh decades of lobbying power from Mercedes-Benz, BMW, and other established manufacturers struggling to compete with Tesla and China’s affordable EV surge.

Not All Carmakers Agree

Interestingly, the automotive industry itself remains fractured. Volvo, the Swedish manufacturer, issued a noteworthy dissent: the company expressed concern that “backing down on long-term commitments in favor of short-term gains risks undermining Europe’s competitiveness for many years to come.” Unlike its German counterparts, Volvo had already committed to meeting the original 2035 deadline. The company’s preference? Accelerated investment in charging infrastructure rather than regulatory flexibility.

Issam Tidjani, CEO of Cariqa—a Berlin-based EV charging marketplace—echoed this sentiment. He warned that the weakened mandate could stall the entire electrification movement. “History shows that this kind of flexibility has never worked out well,” Tidjani cautioned. “It delays scale, weakens learning curves, and ultimately costs industrial leadership rather than preserving it.”

Infrastructure Investment as a Counterbalance

The Commission did attempt to offset concerns through its “Battery Booster” initiative, committing €1.8 billion to build a domestically controlled battery supply chain. The strategy acknowledges a real vulnerability: Europe’s dependence on foreign battery suppliers.

Verkor, a French startup manufacturing lithium-ion cells for EVs, welcomed the Booster. The company recently unveiled its first large-scale factory in Northern France—a milestone after Swedish competitor Northvolt faced production obstacles. For Verkor, the EU’s battery investment signals critical support for homegrown alternatives to Asian and Chinese suppliers.

Yet skeptics question whether €1.8 billion can truly compensate for a relaxed emissions mandate. The policy change risks sending the message that Europe is willing to compromise on climate urgency when traditional industries pressure policymakers—hardly an inspiring narrative for entrepreneurs betting their careers on the transition.

A Broader Uncertainty Looms

Another wild card: the United Kingdom’s next move. The U.K. operates its own 2035 combustion engine ban, but whether it will mirror the EU’s flexibility remains unclear. Notably, the U.K. has avoided imposing tariffs on Chinese EVs, even as their market share climbs and domestic makers voice alarm.

These interconnected decisions—from Brussels to Beijing to London—will ultimately determine whether Europe leads or follows in the electric vehicle era. The current trajectory suggests cautious optimism mixed with undeniable anxiety among those who see climate transition as Europe’s economic opportunity, not a burden to be managed.