Asger Risom
Mercedes-Benz CEO Ola Källenius has issued a stark warning: if the European Union sticks to its 2035 ban on combustion-engine cars, the continent’s automotive industry could face collapse.
Mercedes-Benz CEO Ola Källenius has issued a stark warning: if the European Union sticks to its 2035 ban on combustion-engine cars, the continent’s automotive industry could face collapse.
Mercedes Walks Back EV-Only Goals
Just four years after pledging to go all-electric in Europe “where market conditions allow,” Mercedes has backtracked. The company now warns that phasing out gas and diesel cars entirely is economically risky.
“We Need a Reality Check”
Källenius told Handelsblatt that the EU must adopt a more balanced approach to decarbonization. “Otherwise, we are heading at full speed against a wall,” he said, urging a technology-neutral policy that includes combustion engines.
The 2035 ICE Ban Under Fire
Under current EU plans, sales of new combustion-engine vehicles will be banned by 2035. Källenius, also head of ACEA, warned this could lead to a buying rush before the deadline—undermining climate goals.
EV Adoption Still Lags Behind
Despite the push toward electrification, EVs made up only 17.5% of car sales in Europe and EFTA countries in early 2025. Plug-in hybrids were just 8.7%, and even traditional hybrids—including mild-hybrids—were only 35%.
EU May Revisit the Ban
The 2035 ban isn’t final. The European Commission has pledged to review CO₂ regulations in the near future, raising hopes among automakers that more flexibility—especially for hybrids—could be introduced.
Mercedes’ Own EV Sales Are Slipping
Only 8.4% of Mercedes’ global deliveries in the first half of 2025 were EVs—down from 9.7% a year earlier. Even including plug-in hybrids, electrified vehicles made up just 20.1% of total sales.
Hybrids Could Offer a Compromise
Many in the industry hope the EU will extend the life of plug-in and full hybrids beyond 2035. These technologies may serve as a bridge while infrastructure and consumer demand catch up.
Industry Braces for Major Decisions
As review talks approach, automakers like Mercedes are pushing for regulatory realism. Källenius’ warning underscores the high stakes: without policy adjustments, Europe’s car industry could face an existential threat.
