Mercedes-Benz, once a proponent of an aggressive electric vehicle transition, has significantly shifted its stance, with its CEO now cautioning that an outright ban on internal combustion engine (ICE) vehicles in Europe could trigger the industry's collapse. This stark warning comes amidst concerns that the European Union's ambitious 2035 deadline for phasing out traditional gasoline and diesel cars is economically unsustainable and disconnected from market realities.
Ola Källenius, who leads Mercedes-Benz and also serves as the President of the European Automobile Manufacturers' Association (ACEA), recently emphasized the critical need for a 'reality check' regarding the European Union's proposed ban on new combustion engine car sales by 2035. In an interview with Handelsblatt, Källenius articulated a grave concern that the steadfast adherence to this policy could precipitate a catastrophic downturn for the European automotive sector. He stressed that while decarbonization is an imperative, the strategy to achieve it must be technologically agnostic, rather than exclusively favoring electric vehicles. He pointed out that forcing a premature cessation of ICE vehicle production risks driving the industry 'full speed against a wall,' with severe repercussions for the economy.
Källenius further elaborated on the potential unintended consequences of the 2035 ban, predicting a surge in demand for gasoline and diesel cars in the years leading up to the deadline. This pre-emptive purchasing spree, driven by consumers' desire to secure ICE vehicles before they are outlawed, would paradoxically negate any short-term environmental benefits and fail to contribute positively to climate objectives. His argument underscores a fundamental disconnect between regulatory ambition and the practicalities of consumer behavior and market dynamics.
Data from the first half of the year corroborates Källenius's concerns about the slow pace of electric vehicle adoption. Across EU countries, the UK, and EFTA nations, battery electric vehicles (BEVs) constituted only 17.5% of total car sales. When accounting for plug-in hybrids, the share of electrified models collectively reached a modest 20.1% for Mercedes-Benz's global shipments during the same period. These figures are significantly below the widespread adoption rates required to make a complete transition to electric vehicles by 2035 feasible without severe economic disruption. The European Commission, despite its firm stance, is expected to review the CO₂ Standards Regulation for cars and vans in the coming months, offering a potential window for reconsideration or adjustments to the ban.
The debate surrounding the 2035 ban highlights the complex interplay between environmental policy, economic viability, and technological readiness within the automotive industry. As European policymakers deliberate the future of mobility, the appeals from industry leaders like Källenius for flexibility and a more nuanced, technology-neutral pathway to decarbonization underscore the immense challenges ahead. The ultimate decision will have profound implications not only for the profitability and sustainability of car manufacturers but also for the broader European economy and its global competitiveness.