EU member states shall offer vehicles powered by E-fuel at least the same subsidy as what EVs are enjoying, a European Court rules yesterday.

According to the court, carbon-neutral fuel, also known as E-fuel, is a synthetic fuel made by capturing CO2 from atmosphere or made from biowastes, using 100% renewable energy in its production process so that it has net zero contribution to the carbon-dioxide in atmosphere. In contrast, EVs depend on how electricity is generated by powerplants, which is far from carbon neutral in the EU currently, nor it is expected to reach carbon neutral in the foreseeable future. This means vehicles running E-fuel should be seen as a greener solution to EVs and therefore should enjoy the same or more subsidies.

Responding to the ruling, Germany and Italy said they will propose a grant of up to 15,000 euros each new E-fuel vehicle sold, doubling from what EVs are receiving currently. Moreover, E-fuel cars will enjoy benefits like free parking, waive of registration fee, free tunnel and highway toll. Hopefully this will encourage EV drivers to shift to E-fuel cars.

However, such measures are considered insufficient by environmentalists. Green Peace urges the German government to abandon EVs altogether through scrappage scheme and banning them from 2035, and withdraw the tax subsidies given to EV factories like Tesla and battery makers. Meanwhile, Italian lawmakers are drafting new laws to restrict the use of EVs in regions where E-fuel stations are not available.

Porsche, which has built a pilot plant in Chile to produce E-fuel for its use in motorsport, said it will stop building Taycan with immediate effect. The full-electric successor to 718 Boxster/Cayman under development will be also put on hold, ditto the next generation electrified 911.

BMW said the change has relatively little impact to its production, as it can easily refit the electric powertrain of i4 with ICE and rebadge it the 4-Series.

Meanwhile, senior management of Mercedes-Benz is under pressure to resign, as the firm has been betting on EVs and announced to become a pure EV maker by 2035, even though its first wave of EVs, i.e. EQS, EQE and AMG EQS53, caught lukewarm reception.

Volkswagen said it will evaluate the possibility of converting its MEB platform cars to ICE power through the next Over-the-Air update.

Things look better in Italy, where Ferrari celebrates its launch of Purosangue crossover with V12 engine while stops the work on electrified version, allowing its engineers to take an early summer vacation. Lamborghini said it will remove the electric motors and battery from its new-born Revuelto when it reaches customer’s hands. Hopefully this will create an RWD Lamborghini that weighs 1475 kg yet still offers 825 horsepower, more to the joy of customers.

In Formula One, FIA said its new engine rule from 2026 will abandon turbo hybrid V6 and revert to naturally aspirated V12 drinking E-fuel, so to recapture the aural excitement it has lost in the past couple of decades. Moreover, as fuel consumption is no longer an environmental issue with E-fuel, engine displacement will be boosted to 5 liters and carburetors will return, ditto refilling during the race. Hopefully this will please its oil company partners.