In late 2020, California and then the United Kingdom took a stand on the future of the internal combustion engine (ICE) vehicle. To me, this moment was the beginning of the end for ICE vehicles: California, the fifth-largest economy in the world and the state with the most new car sales across the U.S.; and the U.K., a leading G7 nation, both proposed mandates for 100 percent of new passenger vehicles sales to be zero-emission vehicles (ZEVs) by 2035.
Yes, other countries have ambitious ICE vehicle end date goals, targets and mandates. Norway’s target to reach 100 percent share of ZEVs in passenger vehicle sales by 2025 is a notable one. However, California and the U.K.’s announcements felt revolutionary because they changed the narrative on electric vehicles (EVs) and ZEVs.
Now, we’re poised at another tipping point. But first, some background on how we got here.
California’s action sparked a cascading impact across other U.S. states, one that continues to be felt. Its Advanced Clean Cars program, used to implement the ZEV mandate, only regulates vehicle emissions through 2025. Other states that follow California’s vehicle emission standards began preparing for new vehicle emission regulations to come from California for 2026-2035. (That initiative is known as Advanced Clean Cars II.) The California Air Resources Board will hold the second of two hearings set for Aug. 25 where it will officially finalize the adoption of the new vehicle emissions standards that effectively set a ZEV mandate for 2035.
Meanwhile, in the U.K., the government recently concluded an initial public consultation period on its ZEV mandate in June. Following the review of comments, it will publish the final ZEV mandate proposal consultation with a goal to release a final regulation by early 2023. It is unclear how the recent resignation of U.K. Prime Minister Boris Johnson will affect or delay the release of the final proposal. The plan is for the ZEV mandate to come into force in January 2024, with the goal of achieving 100 percent ZEV sales for new cars and vans by 2035.
Now, it seems we have another “beginning of the end” moment for ICE vehicles, and I suspect it will be the last nail in the coffin. It appears that the European Union could very soon adopt a policy that will effectively end the sale of ICE passenger cars by 2035. And by very soon, I mean by late October or early November.
That is what I learned when speaking with Alex Keynes, clean vehicles manager at Transport & Environment in Brussels. Transport & Environment is a leading European NGO campaigning for cleaner transport, and Keynes is at the forefront of the EU’s ZEV mandate journey.
So what do I mean exactly, and how did we get here? A little over a year ago, the European Commission introduced a large-scale climate package of legislation titled the Fit for 55 Package. Buried within this package was a proposal for increasing automaker CO2 reduction targets, including a requirement to phase out all CO2 emissions based on passenger vehicle tailpipes by 2035. In effect, a ZEV mandate.
Once the European Commission releases a proposal, it goes to the European Parliament, which includes 705 directly elected members, and the European Council, comprised of 27 member state members. For a European Commission proposal to become law, it must be approved by both the European Parliament and Council. Then all three political institutions meet together, in what is informally called trilogues, to negotiate the final text of the law.
The big news is that the 2035 target of 100 percent CO2 emissions reduction from passenger tailpipes was confirmed by the European Parliament in early June and by the Council on June 28, setting the stage for the trilogues to proceed. “The trilogues could start after summer, so I reckon September … and would guess that by early November or even late October, there will be a deal on the final text,” Keynes said. “Bear in mind, all three institutions now have that [100 percent CO2 emission reduction target by 2035] as their official position … so there is no reason that this should not pass, and it would be quite crazy if it didn’t at this stage.”
To me, such a moment seems historic and will send shockwaves across an already disrupted automotive industry. Many popular European automakers such as BMW, Volvo, Volkswagen and Audi are already releasing and selling EVs to meet strict European vehicle CO2 emission standards. It’s hard for me to imagine a world, in 2035 or earlier, where automakers won’t entirely convert to electric for their new passenger vehicles across all major global markets, as it will become too costly and inefficient to manufacture a fleet of both ICE and ZEV vehicles.
I see the EU’s push on ZEVs impacting no other country more than the U.S., which has a goal, through executive order, to achieve 50 percent EV sales for new passenger vehicles by 2030. The U.S. target may not matter if ambitious states such as California, along with countries and regions around the world, push the market faster. I suspect some automakers will continue selling cheaper ICE vehicles in markets where they still can, but for the most part, the EU decision may be the final push over the edge for any automaker trying to walk the fine line between ICE vehicles and ZEV.
“Clearly [the 100 percent CO2 emission reduction target by 2035 is] going to transform the market … More and more car makers will be transforming their entire organizations to go 100 percent electric and, of course, they are not just going to do that in the EU but in the U.S. as well,” Keynes said.
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