The EU has just sealed a climate‑crunch decision: from 1 January 2035 no new internal‑combustion‑engine car will be allowed on the road in any of the 27 member states. The European Commission announced the “Fit‑for‑55” amendment on 18 July 2024, locking in a hard‑stop that will reshape the continent’s 450 million‑vehicle market.
The legal backbone is Regulation (EU) 2024/XXX, which will enter into force on 1 January 2025 and obliges every member state to ban the registration of new ICE cars – including hybrids – from the 2035 cut‑off date. The text sets a “soft‑landing” clause for pre‑2025 models but forces a CO₂‑equivalence ceiling of 50 g km⁻¹ for any leftovers. Failure to comply will trigger infringement procedures and possible fines of up to 5 % of national GDP, while imported ICE vehicles could face border carbon adjustments.
For UK manufacturers the shock is immediate. Jaguar Land Rover, which still ships almost half its output to the EU, has pledged a £2 billion revamp of its Solihull plant to roll out an all‑electric platform by 2030 – a move the company says is driven by the EU ban. JLR’s investment plan was unveiled in October 2024. Meanwhile, Tier‑1 suppliers face a projected £1.5 billion loss in combustion‑engine component sales, offset by a £2.2 billion upside in batteries and electric drivetrains, according to a KPMG forecast. KPMG’s 2024 automotive outlook outlines the revenue shift.
The ripple will be felt on the used‑car market too. Eurotax predicts a 10‑15 % drop in resale values for three‑to‑five‑year‑old petrol and diesel cars by 2030, far steeper than normal depreciation. Eurotax’s analysis flags the “value cliff” created by the EU ban. Yet the total cost of ownership for an electric vehicle is set to become competitive by 2027, as battery prices fall to around £85/kWh and fuel savings rise. The Office for Low‑Emission Vehicles estimates an extra £2,500 upfront cost in 2025, offset by £2,000 a year in fuel and maintenance savings.
In Westminster the debate has already crystallised. The House of Commons Transport Committee’s recent hearings warned that “dual‑track production will force manufacturers into costly re‑tooling” and urged the government to bring the UK ban into line with the EU’s 2035 deadline. The committee’s 2024 report captures that pressure. Policy advisers are now weighing four options – from aligning the ban date to introducing a green border adjustment or expanding plug‑in grants – with the “alignment” route gaining the most cross‑party traction. The Institute for Government’s briefing outlines these pathways.
What to watch next? A Transport Decarbonisation Alignment Bill is slated for its second reading on 30 October 2024, followed by a committee stage debate on green border adjustments in December. The parliamentary calendar shows the key dates. If the UK adopts the EU’s 2035 cut‑off, manufacturers can abandon the costly dual‑track strategy, the used‑car sector will have clearer depreciation curves, and the country can position itself as a competitive EV exporter rather than a stranded ICE producer. The clock is now ticking – and the next legislative moves will decide whether Britain rides the electric wave or is left in the exhaust fumes.
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