The European elections are fast approaching, and manufacturers and some players in the car industry have recently set a deadline of 2035 for the end of total sales of new thermal cars in the EU in 2035.

Not wishing to reverse this decision entirely, producers would like to have extra time to better prepare the industry for changes and not to start this energy transition at a forced pace. At the same time, the market and customers seem to agree with the manufacturers. Is it necessary to hide thermal energy so quickly?

Electricity slides, heat restores positions

The termination of purchase subsidies in Europe, in particular in Germany, led to slowing sales of electric cars, thus logically favoring thermal models. This development disrupts the growth of the electricity market in 2023, but is it enough to call into question European plans to end the sale of heat by 2035?
Some brands that began their transition to electricity by abandoning large-scale thermal models are experiencing difficulties because they are unable to compensate for this transition by increasing their sales in the electricity sector.
As proof, thermal model launches are on the rise. “The pace of energy transformation will now be determined by consumers and market conditions”, explains Ola Kellenius, CEO of Mercedes-Benz. Indeed, buyers are increasingly reluctant to be interested in the assortment of cars, the renewal of which is motivated solely by the requirements of the standards and the approach to the ban on the sale of new thermal cars until 2035.

Several new thermal models have been released to the market

Despite the growth in sales of electric cars, manufacturers such as Volkswagen continue to introduce new models equipped with diesel and gasoline engines, such as the Passat and Tiguan. Peugeot will launch its new 3008 in diesel and petrol as well, while Mercedes has just announced the continuation of production of its thermal models beyond 2030.
Energy mix statistics for new car sales point to the dominance of combustion engines in the EU, even with renewed interest in diesel in recent months. As proof, in January 2024, with 35.2% of sales, gasoline took first place in Europe. They are preceded by hybrids with 28.8% of orders, followed by diesel (13.4%). Gasoline and diesel account for almost every second sale. Electric cars make up 10.9%, and electric cars – 7.8%.

Prices are still dictated by the market

Buyers’ preference for thermal cars is also explained by their ease of use and financial considerations. In addition to the additional costs of purchasing fully electric vehicles (sometimes offset by subsidies or well-designed financing offers), uncertainty about their residual value raises questionseven with rental companies like Hertz and Sixt.
The rental giants have also retreated in the face of volatility and the depreciation of electric cars, including models from Audi and Tesla, which lose up to 30% of their value in a single year.

It is even possible to predict that the next European elections will be accompanied by a review clause that postpones the phase-out of thermal engines planned for 2035. In any case, this is what the manufacturers would like.