The European Union may be loosening fleet emissions targets to allow combustion engines beyond 2035, but it still firmly believes that “the future is electric.” While new regulations usually add headaches for automakers, there’s one bullet point in the EU’s “Automotive Package” they should universally welcome. It calls for the creation of a distinct subcategory of small electric vehicles, dubbed “M1E.”
How small? To qualify for the M1E class, a car must be no longer than 4.2 meters (165.3 inches). That’s still considerably larger than Japan’s kei cars, which are limited to 3.4 meters (133.8 inches). Length isn’t the only requirement, though. These vehicles must be fully electric and assembled in one of the EU’s 27 member states.
Automakers will be encouraged to develop small EVs through so-called “super credits.” An M1E-certified vehicle will count as 1.3 instead of the usual 1, effectively delivering a 30-percent advantage toward CO2 compliance targets. The EU also wants to freeze the requirements for this new class for 10 years, giving manufacturers the stability needed for long-term planning:
‘Prior to 2035, car manufacturers will be able to benefit from ‘super credits,’ as incorporated in the CO2 standards, for small affordable electric cars made in the European Union. It provides a strong incentive for vehicle manufacturers to produce and commercialize higher volumes of small electric vehicles, with an expected indirect positive effect also on the affordability of these vehicles.’
Photo by: Renault
The EU believes establishing the “M1E” category will simplify the legal framework for member states looking to incentivize small EVs through subsidies, tax breaks, and discounted charging. Owners could also benefit from road toll exemptions and preferential access to lanes or parking.
While not everyone agrees with the EU’s decision to step back from a hard 2035 ban on new combustion-engine cars, the “M1E” category should be welcomed across the industry. If EVs are indeed the future, the transition must be driven by small, affordable models rather than oversized, heavy vehicles. Requiring these cars to be built in the EU also safeguards local jobs and helps fend off competition from China.
Several current and upcoming models already fit the bill. These include Renault’s Twingo, 4, and 5, as well as the Volkswagen Group’s ID. Polo, Skoda Epiq, and Cupra Raval. Stellantis is represented by the Citroën e-C3, Opel Corsa Electric, Fiat 500e, and Peugeot E-208. The Slovakia-built Kia EV2 also qualifies, but the Hyundai Inster does not, as it’s produced in South Korea. Likewise, the Mini Cooper and Aceman are assembled in China, which disqualifies them from the “M1E” class.
Photo by: Peugeot
Creating the “M1E” category also indirectly helps automakers continue selling combustion-engine vehicles. By earning super credits, companies can more easily offset the CO2 emissions generated by their ICE models. In theory, this could allow combustion-engine cars to remain on sale longer, especially now that the de facto 2035 ban is being dropped.
Automakers operating in the EU are still required to cut CO2 emissions by 90 percent by 2035 compared to the 2021 baseline. The remaining 10 percent will need to be offset by combustion-engine vehicles powered by e-fuels and biofuels, as well as cars built using low-carbon steel produced within the Union.
The “M1E” class will also help manufacturers meet intermediate emissions targets ahead of the middle of the next decade. The EU is further easing compliance by allowing automakers to “bank and borrow” emissions credits over a three-year period, rather than forcing adherence to strict annual targets. This mechanism is already in place for 2025-2027 and will be extended through 2029. It will also apply to the 2030–2032 period, when even stricter targets take effect.
As for EV adoption, the latest data from the European Automobile Manufacturers’ Association shows continued progress. ACEA reports that 16.4 percent of new cars sold in the EU during the first ten months of the year were fully electric. When Iceland, Liechtenstein, Norway, Switzerland, and the UK are included, that share rises to 18.3 percent.
These measures are clearly steps in the right direction, even if one could argue they should have been taken years ago. As the saying goes, better late than never.
