December 22, 2025
SEOUL – For much of the past decade, the global car industry has been hurtling down a single-track road toward a purely electric future. The destination once seemed fixed. It was a total ban on the internal combustion engine by 2035, a date that came to resemble a high-speed deadline for the end of the petroleum age.
Now, however, the lead car in this race is tapping the brakes. The European Union’s recent signal that it may revise its landmark 2035 ban is more than a technical correction. It marks a shift away from rigid insistence on zero tailpipe emissions toward industrial realism.
Under the proposed revision, Brussels is considering a legislative climbdown that would replace the total prohibition with a 90 percent reduction target. Carmakers would be allowed to continue selling combustion models, including hybrids and diesel vehicles, up to 10 percent of their 2021 emission levels.
The move comes as Europe’s auto champions are under acute strain. Volkswagen is closing domestic plants for the first time in its 88-year history. German and Italian policymakers have warned of further layoffs if compliance pressure remains unchanged.
European manufacturers have also found themselves outmaneuvered by a surge of low-cost Chinese EVs, often priced 40 percent below European counterparts. This widening price gap has turned the green transition into a potential Trojan horse for foreign market dominance.
Political pressure helped drive this recalibration. Germany’s chancellor, Friedrich Merz, has publicly backed a more flexible approach to the 2035 combustion engine ban, arguing that electric mobility should remain central while other technologies, such as synthetic fuels, retain a role in meeting climate goals. His stance reflects growing concern over the competitiveness of the bloc’s auto sector.
The slowdown is not confined to Europe. In the US, the Trump administration eliminated the $7,500 tax credit for electric vehicles in October and has since weakened fuel efficiency standards introduced under the previous administration, offering relief to legacy manufacturers such as Ford and GM.
Major carmakers have responded accordingly. Ford, GM and Stellantis are scaling back electric ambitions and leaning more heavily on hybrids and conventional engines. The much-discussed EV chasm, the gap between early adopters and mass consumers, has widened as charging infrastructure lags and costs remain high.
Amid this global recalibration, South Korea remains stuck in high gear. Seoul’s recently finalized 2035 national greenhouse gas reduction goal, known as the nationally determined contribution, targets a cut of 53 to 61 percent from 2018 levels. Meeting that objective effectively requires zero-emission vehicles to account for 70 percent of all new sales within a decade.
The ambition is admirable, but the risks are substantial. More than 10,000 domestic parts suppliers remain tied to combustion engines. An abrupt transition could hollow out the supply chain before alternatives are viable.
There is also a strategic vulnerability. Strict domestic regulations may clear the path for low-cost Chinese EVs to dominate the Korean market while local manufacturers are still retooling. Infrastructure constraints compound the challenge. Charging networks and grid capacity, already bottlenecks in Europe, pose similar limits at home.
None of this argues for abandoning decarbonization. Transportation remains a major source of emissions, and delay carries its own costs. But Seoul needs to recalibrate its policy pace to match the torque of reality. The green transition is a marathon, not a drag race, and even the front-runners in Brussels and Washington are now searching for pit stops.
South Korea should respond with a more flexible roadmap and a multipath strategy that includes hybrids and carbon-neutral fuels, aligning climate ambition with economic resilience.
Downshifting now may be the surest way to avoid leaving the domestic economy idling in the rearview mirror.