The European Union's recent decision to water down its ambitious 2035 electric vehicle (EV) goals has sent shockwaves through the automotive industry, particularly among electric startups.
Originally set to ban the sale of new internal combustion engine (ICE) cars by 2035, the EU has now revised its target to a 90% emissions reduction, allowing for hybrids and e-fuel vehicles to remain in the mix.
Background of the EU’s 2035 EV Mandate
This rollback, announced in December 2025, comes after intense lobbying from legacy automakers in Germany and Italy, who argued that the strict timeline was unattainable amid slow consumer adoption and competition from Chinese and U.S. rivals.
Electric startups, however, are expressing deep concern, as reported by TechCrunch, fearing that the softened regulations will slow down the transition to a fully electric future and undermine their investments in innovative EV technologies.
Historical Context: A Bold Green Vision
The original 2035 mandate was a cornerstone of the EU’s Green Deal, aimed at achieving carbon neutrality by 2050, with the transport sector being a major focus due to its significant emissions footprint.
Since its announcement, the policy had spurred a wave of innovation and funding for EV startups, positioning Europe as a potential leader in the global shift to sustainable mobility.
Impact on Electric Startups
Now, with the revised goals, startups worry that reduced pressure on traditional carmakers to pivot fully to EVs will divert market share back to hybrids, stunting their growth and threatening their financial viability.
Many of these companies have already invested heavily in battery technology and charging infrastructure, banking on a clear regulatory push towards an all-electric future.
Broader Industry and Environmental Implications
Critics argue that this decision risks undermining Europe’s climate goals, as hybrids and e-fuels may not deliver the same emissions reductions as fully electric vehicles, according to environmental groups.
Moreover, the move could cede ground to China, which continues to dominate the EV market with aggressive production and innovation, leaving European firms at a competitive disadvantage.
Looking to the Future: Uncertainty Ahead
Looking ahead, the diluted policy introduces uncertainty for investors in the EV space, potentially slowing down capital flow into startups that were poised to drive the next wave of green innovation.
While some analysts suggest that EVs remain the long-term future of transport, as noted in recent Reuters coverage, the EU’s retreat may delay this inevitability, reshaping the industry’s trajectory for years to come.
Alfred Lee
