BRUSSELS, April 22 (Reuters) - The EU needs to rethink

its policies to make a 2035 ban on new petrol car sales feasible

as electric vehicles (EVs) remain unaffordable and alternative

fuel options are not credible, the EU's external auditor said,

jeopardising its 2050 climate goals.

The 27-member bloc wants to achieve net zero emissions by

2050, meaning it will emit no more than it can balance out with

measures to remove carbon dioxide from the atmosphere such as

reforestation programmes.

It hopes to meet its targets with the widespread use of

electric vehicles as road transport accounts for nearly a

quarter of its emissions.

The EU wants to have at least 30 million zero-emission cars

on European roads by 2030, or about 12% of the current car

fleet. However, the European Court of Auditors (ECA) cautioned

the bloc may create new economic dependencies and hurt its own

industry.

As it stands, high EV production costs in Europe means the

bloc will have to rely on cheap imports, mainly from China, if

it sticks to the 2035 goal. China accounts for 76% of EV battery

output compared with the EU that represents less than 10% of

production globally.

"The EU faces a conundrum, how to meet goals without harming

industrial policy and hurting consumers," Annemie Turtelboom, an

ECA member, told reporters. She added that 2026 will be a key

year for a policy review.

Tesla is the leading EV maker in the United States

and Europe but has come under pressure to slash prices due to

competition from Chinese cars. Similarly, European carmakers

like Stellantis ( STLA ) that owns Peugeot and Fiat, and

Renault are now racing to develop their own affordable

EV models.

While EV purchases have been on the rise in the EU, the

increase was largely due to subsidies. Further, charging

infrastructure is lacking with 70% of charging points

concentrated in just Germany, France and the Netherlands. The EU

is falling short of its aim to set up 1 million charging

stations across the bloc.

"(EV) prices would need to halve and subsidies do not seem

to be a viable tool ... Batteries alone already costs 15,000

euros when produced in Europe," Turtleboom added when speaking

to reporters.

Alternative fuels like biofuels, e-fuels or hydrogen remain

uneconomic at commercial scale.

Adding to the difficulties in hitting its 2050 goal, the ECA

said the EU has not cut real CO2 emissions from cars despite new

testing standards and measures such as Euro 6.

In a January report, the ECA attributes this to the gap

between laboratory tests and real world emission tests. The

Commission was relying on lab tests, which created a skewed

version. In reality, average emissions from diesel cars are the

unchanged from 2010 at 170 grams of CO2 per kilometre while

petrol cars are just down 4.6% at over 160 g CO2/km.

"Despite lofty ambitions and strict requirements, most

conventional cars still emit as much CO2 as 12 years ago."

Nikolaos Milionis, ECA member, said in a statement, attributing

part of the failure to a rise in the average weight of cars.