BRUSSELS–In another indicator of the kinds of changes that may have a bearing on the auto lending market in the U.S. a decade from now, the European Union has reached a deal to effectively ban new combustion-engine cars from 2035.
The move is aimed at reducing carbon emissions.
For credit unions, the move to EVs raises concerns around financing, collateral and more, including responding to some of the EV manufacturers that use direct to consumer financing models.
In a deal reached by the bloc’s three key institutions -- its executive arm, the parliament and member states -- carmakers will be required to reach a zero-emission target by 2035. The agreement requires a 55% cut in emissions this decade as the EU sets a course to reach climate neutrality by 2050, according to Bloomberg.
“European car makers are already proving they are ready to step up to the plate, with increasing and increasingly affordable electric cars coming to the market,” the EU’s climate chief, Frans Timmermans, said in a statement quoted by Bloomberg. “The speed at which this change has happened over the past few years is remarkable.”
‘Global Ramifications’
The report said the agreement has “global ramifications,” adding that “as the world’s largest trade bloc, the EU has a reputation for setting standards globally and is home to many some of the biggest car manufacturers like Volkswagen AG and Daimler Truck Holding AG.”
The former said this week that it would stop selling combustion engine cars in Europe between 2033 and 2035.
As CUToday.info reported earlier, the state of California announced in August a plan to mandate a gradual phasing out of vehicles that run on combustion engines, with only zero-emission cars and a small portion of plug-in hybrids allowed by 2035. That move will ripple beyond the Golden State, as the rule will likely be adopted by 15 other states that have signed onto California’s existing zero-emission vehicle program, Bloomberg added.
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