Volkswagen CEO Calls for Delay to 2035 EV Sales Mandate | UK & EU

Volkswagen CEO Thomas Schäfer is calling for a reassessment of impending legislation that effectively mandates the end of new combustion engine car sales by 2035, arguing that automakers require “a little more time” to realistically meet the ambitious electric vehicle (EV) registration targets set by governments. The current regulatory framework, stipulating 100% new EV sales in the UK and 90% across the European Union by that date, appears increasingly challenging given the current pace of EV adoption.

Schäfer’s comments come as current EV sales figures fall short of the required trajectory. This year, EVs account for 22% of new car registrations in the UK and 20% in Europe, a significant gap compared to the 2035 targets. The Volkswagen chief executive suggests that the existing timelines are, in his view, unrealistic given these numbers.

The Scale of the Transition

The shift to electric vehicles represents a fundamental restructuring of the automotive industry, requiring massive investment in new technologies, manufacturing processes, and supply chains. Volkswagen, like other major automakers, has committed substantial resources to electrification. However, the speed at which consumers are adopting EVs is proving to be a critical factor. The European Commission has previously investigated Volkswagen, along with Daimler and BMW, over potential antitrust violations as reported by the EU Commission, highlighting the regulatory scrutiny the industry faces.

The financial implications of missing these targets are significant. Automakers face potential penalties and reputational damage, although governments risk falling short of their climate goals. The cost of compliance – developing and producing EVs, building charging infrastructure, and incentivizing consumer adoption – is substantial. Volkswagen’s own “ID. Promise” as detailed on the Volkswagen UK website, offering customers 100 days to try an EV and return it if unsatisfied, demonstrates the company’s confidence in its electric offerings, but also acknowledges the potential for consumer hesitancy.

Impact on Consumers and the Supply Chain

A slower-than-expected transition to EVs could have several consequences for consumers. Limited EV supply could lead to higher prices, while insufficient charging infrastructure could hinder adoption, particularly in rural areas. The availability of critical raw materials, such as lithium and cobalt, needed for battery production, is also a growing concern. Supply chain disruptions and geopolitical factors could further exacerbate these challenges.

The automotive supply chain is undergoing a massive transformation. Traditional component suppliers are facing pressure to adapt to the new EV landscape, while new players specializing in battery technology and charging infrastructure are emerging. This shift creates both opportunities and risks for businesses throughout the supply chain. The Volkswagen Group, for example, is investing heavily in battery production through its PowerCo subsidiary, aiming to secure its supply of battery cells and reduce its reliance on external suppliers.

The Broader Automotive Landscape

Volkswagen’s concerns are not unique. Other automakers are also grappling with the challenges of meeting EV targets. The pace of EV adoption varies significantly across different countries and regions, influenced by factors such as government incentives, charging infrastructure availability, and consumer preferences. The success of models like the Volkswagen Tiguan and T-Roc as highlighted on the VW UK site demonstrates continued demand for traditional vehicle types, even as the industry pivots towards electrification.

The competitive landscape is also evolving rapidly. New EV manufacturers, such as Tesla and Rivian, are challenging established automakers, while Chinese companies are emerging as major players in the global EV market. This increased competition is driving innovation and lowering prices, but also creating uncertainty for traditional automakers.

Regulatory Considerations and Potential Adjustments

The 2035 deadline for phasing out combustion engine cars is enshrined in EU legislation. However, there is growing debate about whether the targets are achievable and whether adjustments are needed. Some policymakers are calling for a more flexible approach, allowing for a longer transition period or exemptions for certain types of vehicles. The UK, while currently aligned with the EU targets, may diverge from the EU regulations post-Brexit.

The European Commission is currently reviewing its “Fit for 55” package, which includes the 2035 target. This review provides an opportunity to reassess the feasibility of the targets and consider potential adjustments. Any changes to the regulations would have significant implications for automakers, suppliers, and consumers.

What’s Next for EV Policy?

The coming months will be crucial in determining the future of EV policy. The European Commission is expected to publish its review of the “Fit for 55” package in the coming weeks. This review will likely inform discussions among EU member states and shape the future regulatory landscape. Automakers will continue to lobby for a more realistic and flexible approach, while environmental groups will push for more ambitious targets. The UK government will also be considering its own EV strategy, taking into account the specific circumstances of the UK market.

Beyond the regulatory debate, several key developments will shape the EV market in the near term. These include advancements in battery technology, the expansion of charging infrastructure, and the development of new EV models. The success of these efforts will be critical in accelerating EV adoption and achieving the ambitious climate goals set by governments around the world. The 100-day ID. Promise offered by Volkswagen, valid until March 31, 2026, is a concrete example of the industry’s efforts to address consumer concerns and promote EV adoption.