Ten years after Dieselgate—the emissions scandal in which Volkswagen Group and other major automotive companies were found to be manipulating lab-based emissions tests—industry players are once again pushing for policy amendments that would significantly underestimate the true environmental impact of internal combustion engine vehicles. With the EU’s CO2 standards for cars and vans currently under review, certain companies and industry associations appear to be targeting the “utility factor” for plug-in hybrid electric vehicles (PHEVs) in an apparent effort to underestimate emissions and extend the role of PHEVs, risking emission goals under the CO2 standards.
Since 2020, the EU has used utility factors to estimate the CO2 emissions of plug-in hybrid electric vehicles to assess their compliance with emissions standards. The utility factor is a measure of the estimated distance a PHEV travels under the power of its electric motor compared to its internal combustion engine (ICE). The higher the utility factor, the higher the expected proportion driven on its electric motor, reducing estimated CO2 emissions.
Initially, the EU applied utility factors calculated in laboratory conditions as defined by the Worldwide Harmonized Light Vehicles Test Procedure (WLTP). However, early analysis of real-world driving data revealed that lab-based utility factors were overly optimistic. In reality, PHEVs traveled less distance under their electric motors, as drivers were charging less frequently than anticipated and relying more heavily on combustion engines. Consequently, the actual CO2 emissions of PHEVs were substantially greater than estimated. In response, the EU mandated on-board monitoring from 2021 to more accurately track the real-world utility factor of PHEVs.
Based on the on-board monitoring data, the EU lowered the assumed share of electric driving for PHEVs for the 2025 utility factors. In 2027, the EU plans to apply more stringent utility factors for all new PHEVs. Under the more accurate utility factors, PHEVs will have higher estimated emissions. Consequently, to remain compliant with EU emissions standards, automakers will have to transition away from PHEVs to battery electric vehicles (BEVs) faster.
With the first official reforms applying from this year, automotive companies and industry associations have ramped up advocacy opposing the more stringent utility factors. Much of this advocacy comes from entities with strong access to policymakers: the European Automobile Manufacturers Association (ACEA), the European Association of Automotive Suppliers (CLEPA), and automotive parts supplier Valeo were all part of the Strategic Dialogue hosted by Commission President Ursula von der Leyen earlier this year.
In their statements, automotive industry actors advocate against the more stringent emissions calculation, emphasizing concerns that it will make PHEVs unattractive. This argument is frequently coupled with a vague ask for “technology neutrality,” a narrative that industry often uses to push for weaker climate policy. The IPCC is clear that government policy that prioritizes selected technologies and pathways to decarbonize specific industries, such as full electrification, is most effective for achieving 1.5°C pathways.
| Entity | Comment |
|---|---|
| German Association of the Automotive Industry (VDA) | “The planned adjustments to the utility factor of plug-in hybrids (weighting factor that reflects the proportion of electric journeys) should be suspended from 2025” (Press Release, March 2025) “PHEVs should not be made unattractive at this point by tightening CO₂ assessments ("utility factor"), as currently provided for in European legislation. This would undermine the economic viability of these technologies. This would also be disastrous for employment policy in the current transformation of these locations” (Press Release, September 2025) |
| European Automobile Manufacturers Association (ACEA) | “if the EU tightens existing rules that account for the driving distance plug-in hybrids (PHEVs) cover using electric power—the so-called ‘utility factor’, this could counterproductively give an advantage to our competitors. Dropping the potential utility factor restriction is the logical option, opening the industrial perspective for manufacturing technologies in Europe” (Chair, Ola Kaellenius, Letter to EU President Ursula von der Leyen, August 2025) |
| European Association of Automotive Suppliers (CLEPA) | “CLEPA urged the Commission to reconsider the legislation on CO2 standards to tackle short-term issues related to fines and inclusion of a utility factor (penalising plug-in hybrid solutions) as well as more structural issues with reference to technological neutrality” (Minutes of meeting with Cabinet of President Ursula von der Leyen, February 2025) “A substantial and timely revision of the CO₂ regulation, true openness to all climate neutral technologies - including a freeze of the utility factor for plug-in hybrids - and decisive steps toward a realistic regulatory framework that supports a role for hybrids, range extenders, hydrogen, renewable fuels are essential.” (President, Matthias Zink, Press Release, September 2025) |
| Toyota Motor | “TME asked for technological neutrality on decarbonisation and pointed to the role of the utility factor calculations for plug-in hybrid electric vehicles” (Meeting with Head of Unit, DG GROW, April 2025) |
| Valeo | “Called for recognition of the role of the PHEV post 2035. Called for adapting the PHEV utility factor” (Meeting with Cabinet of Executive Vice-President Stéphane Séjourné, March 2025) |
Over September 2025, InfluenceMap also tracked further advocacy from VDA, ZF Group and Bosch who all met with Nils Behrndt, Deputy Secretary-General of 'Policy Coordination' at the Secretariat-General, to stress concerns over reforms to the utility factor. VDA had a further meeting with Mark Nicklas, a Head of Unit at DG GROW, in which it asked for ‘flexibility’ around the utility factor.
In the above statements, the automotive industry appears to urge the EU to drop the more accurate utility factors to prolong the role of PHEVs. This would come at the expense of real life emissions reductions: Transport and Environment’s analysis of recently released EU data reveals that plug-in hybrid electric cars are now emitting five times more than official tests claim, on average. On this basis, delaying the utility factor reforms would severely weaken the emissions reduction potential of the EU’s CO2 emissions standards for cars and vans. Such flexibilities have already been granted in the United States, where the Environmental Protection Agency (EPA) has delayed reforms to its own utility factors from 2027 to 2031 “to give manufacturers ample time to transition to the new compliance calculation.”
In targeting the utility factor, automakers and their industry associations promote a continued reliance on PHEVs that perform poorly in real-world conditions and risk undermining the EU’s broader transition to 100% zero-emission cars and vans by 2035. This advocacy contradicts their broadly positive public position on net-zero emission targets—exposing the continued efforts of key automotive industry players to undermine meaningful emissions reductions while claiming public support for top-line climate targets.