Why lifting the limit on internal combustion engines by 2035 - represents the greatest possible risk to European innovation and ownership of car brands and the red carpet of the Chinese auto industry. So why, without decisive action, will we lose our car industry by 2035?
Europe was once a pioneer in automotive innovation, but today we are lagging behind China and the USA. Lifting the ban on internal combustion engines by the year 2035 is not a victory, but a capitulation to progress. While Geely, BYD and Tesla are conquering global markets, European brands are disappearing – Lotus, Volvo, Smart have already fallen into the hands of foreign investors. If we don't act now, by 2035 the automotive industry as we know it will be history.
Yesterday's heated debate in the corridors of the European Commission to completely remove the 2035 deadline for the sale of internal combustion engines is strongly stirred up the automotive industry"This change would bring more freedom for manufacturers to adapt to market conditions and innovation," the European Commission wrote, but many experts warn that it will primarily weaken the pressure on the industry to switch to electrification.
Europe has given up – and it will cost us the auto industry
Imagine Europe in 2035, where innovative car brands with 100% electric vehicles dominate, gigafactories produce batteries, and charging infrastructure is fully developed. This could be a reality if we maintained a clear goal of electrification by 2035. But instead we have political indecision, unclear regulations, and a failure to see the future. The European Union has lifted its ban on the sale of internal combustion engines by 2035, meaning that the automotive industry will now be subject to market forces.
And these forces are currently working in favor of China and the United States. While European manufacturers are delaying decisions, Chinese and American brands have set clear goals and are investing in the future. European brands have already begun to pass into foreign hands. Lotus, once a British sports car icon, is now owned by China's Geely. Volvo, synonymous with Scandinavian safety, has also been under Geely since 2010. Smart, once a Mercedes innovation, is now a joint venture between Mercedes and Geely, with most development taking place in China. Even MG, once a symbol British automotive heritagee, is now completely under Chinese control SAIC.
These are only the most prominent examples – outside of supply chain trends that are even worse, but the trend is clear. If European countries and companies do not invest in their own industry, we will lose even more car brands by 2035. (source: Financial Times, 4 March 2025).
China accelerates, Europe stands still
While Europe debates, China invests. BYD overtook Tesla in the number of electric vehicles sold in the last quarter of 2023 (source: Bloomberg, January 5, 2024). This trend will continue in 2024. China's CATL and BYD control more than 50 percent of global battery production. The Chinese government withStrategically supports automotive start-ups, builds charging infrastructure and provides subsidies. In the US, meanwhile, Tesla and Rivian are receiving billions of dollars in private investment. Also from Volkswagen. Europe? We are still debating whether electrification is the right path, when in China most new cars contain systems for the potential of autonomous driving.
While some European brands like Volkswagen and Mercedes-Benz are already committed to electrification, many manufacturers are questioning whether it’s worth it to accelerate development as regulations ease. Less pressure means less urgency, which leads to a slowdown in innovation. Without strong incentives and clear timelines, we’ll end up buying cars from those who understood where the world was going early.
Why is lifting the 2035 limit dangerous?
The withdrawal of strict regulation by 2035 could have several negative consequences. Without a clear strategic plan, European car brands will become easy prey for foreign investors. Without our own battery production, we will be completely dependent on imports from China, which means higher costs and less control over the technology. If regulation does not require the rapid development of electric and other alternative powertrains, companies will have no real incentive to invest. This means that by 2035, Europe will be just a market for Chinese and American cars, not a global center of innovation.
The Chinese are here – we just don't notice them enough!
Europe has been losing its car brands to foreign investors, especially China, for decades. Volvo, once synonymous with Swedish safety and innovation, has been owned by Geely since 2010, which now also owns the legendary Lotus and 50 percent of Smart. MG, once a British sports brand, is now fully controlled by the Chinese giant SAIC and is becoming one of the leading manufacturers of electric cars in Europe. Polestar, which was created under Volvo, now operates as an independent brand, but still under the Chinese capital umbrella. Borgward, once a prestigious German brand, was also an attempt at Chinese renewal that did not work out. The trend is clear - European brands that cannot find strong investors at home end up in the hands of Asian capital, which then aggressively develops them on a global scale.
Chinese capital is not only taking over traditional brands, but is also increasingly investing in leading European manufacturers and technology companies. Geely already has a nearly 10 percent stake in Mercedes-Benzu, thereby providing strategic insight into German technology and electrification. Dongfeng is one of the key shareholders Stellantis, owner of Peugeot, Citroën, Opel and Fiat, while SAIC is working with Volkswagen in the Chinese market and strengthening its influence within European supply chains. Moreover, CATL, the world's largest battery manufacturer, is investing in gigafactories in Germany and Hungary, thereby securing a long-term supply chain for European electric vehicle manufacturers. While these investments are beneficial for the European economy at first glance, they also mean that European industry is increasingly dependent on Chinese capital and technology - which in the long term puts Europe in a weaker strategic position.
Premium Chinese car brands that will significantly cut EU sales shares this year
Chinese car brands are not only taking over European ones, but are also directly entering the European market with extremely competitive electric vehicles. NIO, known for its innovative replaceable battery system, already offers models such as ET7 and EL6, which compete with Tesla and German premium brands in terms of range and technology. Zeekr, the premium sub-brand of the Geely concern, is with its model Zeekr 001 proved that China also masters superior design, performance, and technologically advanced interiors. Xpeng, one of Tesla's key competitors, is aggressively expanding its presence in Europe with models such as P7 and G9, which offer cutting-edge autonomous driving and powerful electric drives. In addition, the brand is also increasingly gaining ground BYD, the world's largest manufacturer of electric vehicles, which is already penetrating Europe with its models Atto 3, Tang and SealThis new generation of Chinese cars is no longer a cheap alternative to European brands, but is setting new technological benchmarks, with longer ranges, better batteries and often lower prices.
What must Europe do immediately?
Europe can still change course, but only with a decisive and coordinated strategy. First, it needs to set a clear electrification target – without a timeline, companies will not seriously invest in the transition to electric mobility. Massive investment in the battery industry is needed, because without European battery production we become dependent on foreign suppliers. Countries need to support automotive start-ups that can bring fresh ideas and innovations. Tesla started as a start-up, why shouldn’t Europe have its own Tesla? Accelerating the development of charging infrastructure is also crucial, as customers will not switch to electric vehicles en masse if there is no easy and reliable charging option.
Finally, European car brands need to be protected from foreign takeovers. If we don't resist the sale of our own companies, we will only be driving Chinese and American cars by 2035.
Conclusion: Europe needs courage and determination
Europe used to set automotive standards, but now it is just watching as China and the US take the lead. The decision to lift the restriction on internal combustion engines is not a step forward, but a capitulation. Without strict regulation and investment, the European automotive industry will regress, and our brands will continue to fall into the hands of foreign investors.
If we don't act now, we'll just be helplessly watching as once-proud European brands wear Chinese and American logos in 2035. And if that's not enough of an alarm bell to take action, I don't know what is.
