Mercedes CEO Warns EU 2035 Petrol & Diesel Ban Could Collapse Car Industry

Mercedes CEO's Stark Warning

• ⚠️ Ola Källenius, CEO of Mercedes-Benz, warns that the EU's planned 2035 ban on new petrol and diesel car sales could lead to the collapse of Europe's car industry.
• 💡 Källenius, who also serves as president of the European Automobile Manufacturers Association, urges a "technology-neutral" approach to decarbonization, stating that the current policy risks economic damage.
• 💬 He predicts a rush of customers buying the last combustion models before the deadline, which he believes will not help the climate.

Shifting Stance on Electrification

• 🚀 Mercedes-Benz had a bold vision in 2021 to go "all-in" on electric vehicles, aiming to stop selling internal combustion engine (ICE) cars by the end of the decade where market conditions allowed.
• 📉 This vision has since been dialed back significantly, with the company now warning against the rapid phase-out of petrol and diesel vehicles.

Slow EV Adoption & Market Realities

• 📊 Electric vehicle adoption remains low, with fully electric cars making up only 17.5% of new sales in the first half of the year across the EU, UK, and EFTA countries.
• 🚗 Mercedes' own EV sales are slipping, accounting for just 8.4% of global shipments, and even with plug-in hybrids, electrified sales are only 20.1%.
• 🔑 The CEO fears the mandated shift is too fast for the market, supply chain, and consumers, as nearly 80% of Mercedes customers still choose petrol or diesel.

EU Policy Commitment & Review

• ✅ The European Commission remains committed to its target of zero g/km CO2 emissions for all new cars sold from 2035.
• 🔍 While the 2035 ban is up for review, the Commission has indicated it will accelerate work on CO2 standards, reinforcing its stance.

Potential for Compromise

• 🤝 There is strong opposition to the EU's plan from other manufacturers, industry groups, and some governments, which could open the door for compromises.
• 🌱 Possible compromises include allowing plug-in hybrids or full hybrids to continue beyond the 2034 deadline, suggesting a need for a flexible transition period.