EU officially inks complete ban on new combustion vehicles from 2035 onward
Following over five years of debate and a steadfast proposal introduced last year, the EU has agreed upon its first terms under a “Fit for 55” package to significantly reduce carbon emissions in Europe and achieve climate neutrality by 2050. The EU agreement increases required cuts to carbon emissions by 2030 and issues a complete ban on new combustion cars and vans from 2035 onward.
The EU has been working to establish a wide ban on combustion vehicles for years now and is finally making some legislative headway. Countries like Germany have embraced a ban on new combustion vehicle sales as far back as 2016 and have since been joined by other countries like France and the Netherlands, including many of their respective local automakers.
The ban exists under the EU’s larger “Fit for 55” strategy, which aims to reduce greenhouse emissions across its block of members by 55% by 2030, compared to 2021 numbers. This strategy has previously been criticized by conservative groups in the European Union as well as some automakers that believe such deadlines are simply not possible.
Others, like Bentley, Mercedes-Benz, Volkswagen Group, Ford, and Jaguar are all heavily onboard and have already begun pivoting their global production strategies toward becoming all-electric. Stellantis is even following suit, despite previous pessimistic comments from its CEO Carlos Tavares.
Volvo Cars has taken its carbon-cutting even further, announcing an exit from the European Automobile Manufacturer’s Association (ACEA) at the end of this year, stating that the long-running automotive lobby’s benchmarks are not ambitious enough. Stellantis is also cutting ties with the ACEA, but instead cited “challenges of future mobility and a shift away from traditional lobbying activity.”
Whether these EU countries or their local automakers believe a combustion ban by 2035 is possible or not, the legal steps to enforce it are underway, marking an epoch in the history of transportation that sets the stage for a future in which the EV is king.
EU combustion ban
According to a press release from The Council of the European Union, it has reached a provisional agreement with European Parliament to implement stricter CO2 emission standards for new cars and vans. Under the terms of this first agreed upon “Fit for 55” proposal, all EU automakers must reach a zero-emission target for new vehicle sales by 2035.
The decision means that new combustion cars will be banned from registered use on EU roads after 2035. These proposals amend existing rules first laid out in 2019. The aforementioned 55% reduction in carbon emissions by 2030 is also a new increase from the previous goal of 37.5% compared to 2021 numbers. Anna Hubáčková, Czech minister of environment on the EU council, spoke:
Closing a first deal on a proposal from the ‘Fit for 55’ package is a strong signal that the EU is determined to make progress towards climate neutrality and the green transition. Zero-emission mobility will be a building block for slowing down climate change that can create severe disruptions in many sectors of our society, including environment, migration, food security and the economy.
According to the EU council, there will be some exceptions to the 2035 combustion ban. For example, Lamborghini, which is a relatively smaller combustion automaker with limited output, will receive an extra year to reach the outlined climate targets. Other alternatives like vehicles operating entirely on CO2-neutral fuels may still be able to seek new registrations after 2035. That specific proposal is still pending, however.
For now, new combustion vehicles will see a ban in the EU by 2035, and luckily, many automakers are already well on their way to bringing their CO2 emissions down to zero, but they’ll need to speed up for the benefit of the entire planet.
Across the pond, the state of California recently enacted a similar expiry for combustion vehicles. Considering 15 other states follow the same zero-emission regulations enacted in California and two more accept the state’s Low Emission Vehicle (LEV) regulations, you can expect those territories to also adopt the 2035 ban.
Section 177 of the Clean Air Act allows California to set its own emission standards stronger than the federal government while allowing other states to adopt those same standards. This means that as EV adoption continues to grow and more states back an end date for gasoline vehicles, we could soon see a federal ban on combustion, similar to the EU.
Automakers can whine all they want about the issues these bans may present on the global economy in the short term, but there is no point in talking about the economy if we don’t have a livable planet to economize. Even with these latest accelerations, we are still quite behind the eight ball on climate change, but news like this is of course encouraging.
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If you’re considering going electric, May will be a great time to score a deal on an EV lease. Automakers are slashing lease prices on some of the most popular EVs to move inventory – here are four standouts.
Nissan Ariya SUV
The Nissan Ariya SUV has an MSRP of $41,805. Its lease term is 36 months, with $4,409 due at signing and a mileage allowance of 10,000 a year. Monthly payment? A sweet $129!
Nissan cut the 2025 Ariya Engage’s price by $144 in April, so it now has an effective monthly cost of $251 – that’s seriously affordable for an electric SUV. If you’re already a Nissan driver, then you’re going to get an even better deal, because Nissan is offering a $1,000 loyalty discount on the Ariya, which brings its effective cost down to $224 per month.
CarsDirect, which sniffed out this deal, thinks this Ariya deal will be in place until Memorial Day, so take advantage of tariff-free pricing while you can.
Click here to find a local dealer that may have the Nissan Ariya in stock. –trusted affiliate copy
Honda Prologue SUV
The Honda Prologue SUV has an MSRP of $48,850. Its lease term is 36 months, with $1,399 due at signing and a mileage allowance of 10,000 a year. The monthly payment on the Prologue is $239.
The 2024 Honda Prologue has up to $18,800 in rebates, and the price includes a $1,000 lease loyalty discount or conquest offer. In California and other ZEV states, the EX has an effective cost of just $278 per month; in other parts of the US, pricing will be around $30 higher. This offer ends July 7.
Click here to find a local dealer that may have the Honda Prologue in stock. –trusted affiliate copy
Tesla Model 3
The Tesla Model 3 has an MSRP of $43,880. Its best lease term is 24 months, with $1,044 due at signing and a mileage allowance of 10,000 a year. The monthly payment on the Model 3 is $349.
The 2025 Tesla Model 3 still has the $7,500 federal government EV rebate. Several months ago, Tesla reduced the amount due at signing on all Model 3s. And for those who want to lease a Long Range Model 3, the effective cost can be as low as $393 per month.
You can lease the Model 3 for 36 months, but the folks at CarsDirect found that the better deal will be had on 24-month leases. They compared the Model 3’s MSRP to the 2025 Lexus IS 300 F Sport’s MSRP, which is nearly identical, and the Model 3 was around 30% cheaper to lease.
Acura ZDX
The 2024 Acura ZDX has an MSRP of $65,850. Its best lease term is 36 months, with $4,699 due at signing and a mileage allowance of 7,500 a year. The monthly payment on the ZDX is $299.
The 2024 ZDX is Acura’s cheapest vehicle to lease because it features up to $29,450 in lease cash. However, the best deal is limited to California and ZEV states. If you cash in on a loyalty discount or conquest cash, the effective cost is $430 per month. This offer runs til June 30.
Click here to find a local dealer that may have the Acura ZDX in stock. –trusted affiliate copy
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Ford (F) reported its first-quarter earnings, beating Wall Street’s revenue and EPS expectations. However, with Trump’s auto tariffs, Ford is suspending full-year guidance. Here’s a breakdown of Ford’s Q1 2025 earnings
Ford Q1 2025 earnings preview
After crosstown rival General Motors cut its full-year financial guidance last week, investors are waiting to see if Ford will follow suit.
Ford’s previous 2025 forecast called for EBIT of $7 billion to $8.5 billion and capital expenditures between $8 billion and $9 billion.
The biggest threat is Trump’s new auto tariffs, which include a 25% duty on imported vehicles and many parts. Since Ford builds a greater percentage of vehicles in the US than any other major automaker, outside of Tesla, it isn’t expected to see as big of an impact.
CEO Jim Farley called it “an opportunity for Ford,” during an interview with CNN last week, saying the company has a “different footprint, a different exposure for tariffs.”
Ford imports around 21% of the vehicles it sells in the US, while GM imports around 46%. According to Estimize, Wall St expects Ford to post Q1 EPS of $0.0 on revenue of $38.02 billion.
The company reports earnings for each of its three business units, Ford Blue (gas-powered vehicles), Model e (electric vehicles), and Ford Pro (commercial and software business).
In the fourth quarter, Ford’s EV unit (Model e) lost another $1.4 billion while Pro and Blue each reported an adjusted EBIT of $1.6 billion.
Financial breakdown
Ford beat Wall Street estimates, reporting first-quarter revenue of $40.7 billion with an adjusted EPS of 0.49.
- Q1 2025 Revenue: $40.7 billion vs $38.02 billion expected.
- Q1 2025 Adjusted EPS: $0.49 vs $0.0 expected.
The company posted adjusted EBIT of $1 billion, down 63% from Q1 2024. Ford said its first-quarter EBIT suffered a nearly $200 million hit from added tariff costs, primarily in Ford Blue and Ford Pro.
Ford Pro generated an EBIT of $1.3 billion, Ford Blue $96 million, and Ford Model e reported an EBIT loss of $849 million.
For Model e, the company is focused on improving gross margins and “exercising a disciplined approach to investments in battery facilities and next-generation products.” Although still a nearly $1 billion loss, it’s still a $500 million improvement from Q1 2024.
Ford said higher Model e revenue was driven by new EVs launching in Europe, like the electric Explorer and Capri.
The company said its “Power Promise” promotion, which includes a free home charger and several other benefits, has helped drive demand in the US.
Although it’s tracking within its previous full-year adjusted EBIT guidance of between $7 billion and $8.5 billion, Ford is suspending full-year guidance due to the uncertainty surrounding tariffs.
Ford estimates the full-year gross cost of tariffs to be around $2.5 billion. It expects a tariff-related net adverse adjusted EBIT impact of about $1.5 billion for the full year 2025.
Ford also extended its “From America, For America” campaign last week. The promo includes employee pricing on most 2024 and 2025 models and now runs through July 4.
Check back for more info from Ford’s first quarter conference call. Ford is also hosting its annual meeting on Thursday, May 8, where we should learn more about its EV plans and how it will navigate the new tariffs.
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