EU plans to protect its struggling auto industry with new tariffs and relaxed combustion‑engine rules, which a study warns could raise electric vehicle prices and weaken the sector

Executive summary: A study released by an influential think tank warns that proposed EU tariffs on automobiles and a loosening of the planned phase‑out of internal‑combustion engines could make electric vehicles more expensive and harm the auto industry. Higher EV prices would slow the transition to zero‑emission transport, affect automakers’ sales and profit margins, and could alter EU climate‑policy effectiveness.

Who is involved: EU policymakers, European automakers (e.g., Volkswagen, BMW, Mercedes‑Benze), the think tank that produced the study, and consumers considering EV purchase.

Likely next: EU institutions will continue negotiating the tariff levels and combustion‑engine timetable; automakers may adjust pricing strategies or lobby for subsidies; market reactions will be monitored in the coming weeks.

A study from an influential think tank cautions that forthcoming EU tariffs on automobiles and a loosening of the planned phase‑out of internal‑combustion engines could make electric cars more expensive. This would slow the transition to zero‑emission transport, affect automakers’ sales and profit margins, and potentially blunt the effectiveness of EU climate policy. The warning highlights the tension between protecting domestic manufacturers and meeting emissions targets.

What's next — scenarios

Protectionist Lock-in (60%)

EU automakers delay EV platform investments to maximize ICE profits, leading to a 15-20% higher EV price premium for consumers and reduced market share against Asian EV entrants.

Official EU Commission decision to relax the 2035 ICE ban timeline
Announcement of specific tariff rates exceeding 15% for non-EU passenger vehicles
Major EU OEMs (e.g., VW, Stellantis) publicly cutting long-term EV R&D budgets in earnings calls

Hybrid Transition Delay (30%)

Automakers pivot to plug-in hybrids as a transitional niche, keeping production costs stable but failing to achieve the necessary scale for battery cost reductions, resulting in stagnant EV sales growth.

EU regulatory text allowing 10% or more PHEV exemptions in 2030 compliance calculations
Increased shipment data of hybrid models from EU manufacturers to non-EU markets
EU Parliament vote maintaining strict emission caps despite industry lobbying

Policy Reversal and Integration (10%)

EU maintains strict climate targets and avoids punitive tariffs, forcing automakers to accelerate EV adoption through open-source battery platforms, leading to a faster drop in EV prices and stronger export competitiveness.

Public statement from EU Council confirming adherence to the 2035 zero-emission mandate
Signing of trade agreements that exclude cars from new tariff exclusions
Launch of a joint EU-funded battery gigafactory initiative by European OEMs and suppliers

What to watch

EU Commission proposal on the review of Regulation (EU) 2019/631 (Type-Approval) by Q3 2024
Details of the EU-North America trade negotiations regarding automotive tariff concessions within the next 60 days
Q2 2024 earnings reports from major EU automakers regarding EV capex guidance and ICE margin commentary

Timeline

2026-09-22 — Autoindustrie: Studie warnt vor teureren E-Autos durch EU-Zölle und Auflagen (Der Spiegel — Wirtschaft)

Key entities

Sources

Autoindustrie: Studie warnt vor teureren E-Autos durch EU-Zölle und Auflagen — Der Spiegel — Wirtschaft

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