This intention was officially endorsed when the European Parliament approved the legislation, in February last year, that would only permit the manufacturing and sales of zero-carbon emission vehicles from 2035, effectively shutting the door on traditional combustion engines.

The agreement outlines a gradual phase-out where, by 2030, new passenger vehicles must reduce carbon dioxide emissions by 55 percent and new light commercial vehicles by 50 percent compared to 2021 levels, aiming for complete carbon neutrality by 2035.

Last week, Prime Minister Viktor Orbán, in his economic kickoff speech, highlighted this issue specifically, criticizing how EU leaders often make ideologically-driven decisions without the support of impact studies that should underpin concrete figures and target dates.

As Index has covered multiple times, it may be too soon to sound the death knell for conventional cars. Although after 2035, only zero-emission vehicles may be legally sold, there is still room for models equipped with carbon-neutral synthetic fuels or internal combustion engines. This has been made possible primarily thanks to the powerful lobbying of the German automotive industry, which has cleared the path for alternative technologies like synthetic fuels and the use of plug-in hybrids.

Led by the Germans, Europe's automotive industry's lobbying efforts have escalated, taking a political tone as reported by Economx, referring to Politico's article which posits whether the automotive lobby could potentially sweep away Ursula von der Leyen, the President of the European Commission. The battle for traditional automotive manufacturing has now become part of the European parliamentary election campaigns. Aligning with other right-wing parties across different nations, Germany's biggest opposition party, the conservative CDU, has taken a firm stance on retaining clean combustion engines. Rather than fine-tuning, they aim to compel the EU to scrap the impending ban on internal combustion engines set for 2035.

Their goal is to keep and further develop German internal combustion engine technology at the forefront of the global stage, granting a central role to synthetic fuels.

MARKET PRESSURES PERSIST

The European automotive industry prompted by the Germans, is justifiably worried. At last September's IAA Mobility car show in Munich, the scene was dominated by the new wave of electric cars, particularly from Asia chiefly China with nearly half of the exhibitors being foreign, 41 percent of which were Asian. The presence of Chinese brands at the event has doubled in two years.

Recognizing the potential of electric vehicles a decade and a half ago, China redirected its resources into this domain rather than rectifying its significant lag in the manufacturing of internal combustion engine vehicles. Huge investments were made to create a competitive electric vehicle production system, which not only threatens Europe but also the overseas markets.

Manufacturers that have traditionally relied on conventional automotive industry, like Mercedes-Benz and the Stellantis group which encompasses brands such as Citroën, DS, Peugeot, Opel, Vauxhall, Abarth, Alfa Romeo, Fiat, Lancia, Maserati, Chrysler, Dodge, and Jeep wish to retain their globally recognized technological edge in internal combustion engine vehicles for future reliance.

Stellantis has also signaled that it is making the largest ever investment in the South American automotive market: planning to launch more than 40 models, develop engines that run on gasoline and ethanol, and planning the development of Hybrid Flex and Plug-in Hybrid Flex vehicles that combine versatile internal combustion engines with batteries, including at least one fully electric vehicle in the region. These investments will materialize between 2025 and 2030.

ELECTRIC CARS AS LUXURE, HYBRIDS PAVING THE WAY

Several concerns have been raised about electric cars from within professional circles. Index has published two extensive analyses on the subject.

However, there is an even more tangible concern: the high price tag of electric vehicles compared to internal combustion counterparts. While electric cars are luxury items unless imported from China where BYD announced the production of an affordable small electric car at approximately 9,000 euros (~3.6 million HUF) the cheapest electric car in Germany is roughly 22,000 euros (~8.7 million HUF), garnering weak demand. Therefore, in Europe and the United States, there are indicators that manufacturers may quickly revert to the safe refuge of internal combustion engines.

Furthermore, locational factors are crucial for mobility. While electric cars are relatively practical in Budapest and its surrounding areas, including for car-sharing services, they are less so in rural villages. In such localities, where daily transportation can be as minimal as two bus services, vehicle ownership is essential. With lower income opportunities, a negligible portion of the population is purchasing electric cars, which are considerably more expensive than traditional vehicles and face challenges with a lack of sufficient charging infrastructure.

"We must recognize that a strategy relying solely on electric mobility has already failed, and banning internal combustion engines was a bad decision. There are problems with consumer acceptance of electric cars; they are expensive, and there's a lack of charging infrastructure," pointed out Jens Gieseke, the chief negotiator for the European People's Party (EPP), a Christian democratic political family.

That internal combustion engines and electric cars could continue to coexist is best exemplified by hybrid options. The New York Times reported that General Motors, Ford Motor, and Volkswagen have scaled back their ambitious electric car goals due to disappointing sales. Conversely, sales of hybrid vehicles remain "robust," signaling a new realism in mobility.