Executive from significant German automobile corporation advocates for a truthful assessment of transition toward electric vehicles
The European Union's proposed ban on the sales of new petrol and diesel cars by 2035 has sparked a debate among automobile manufacturers, particularly those in Europe. The ban, due for review in the second half of 2025, is raising concerns about the economic impact, technology neutrality, charging infrastructure, consumer behavior, competition, and market challenges.
One of the key concerns is the potential for a market collapse and economic damage. Mercedes-Benz CEO, Ola Källenius, has warned that the EU's ban could lead to a collapse of the car market in Europe, as the industry might struggle to adapt quickly enough to the transition. The current low share of electric vehicles in overall sales suggests that the industry could face significant challenges in meeting the 2035 deadline.
Economic and job impact are also a major concern. A rigid ban could lead to economic damage, job losses, and significant disruptions to the industry, which remains a major source of employment and revenue in Europe.
Industry leaders advocate for a technology-neutral approach, allowing different types of low-emission vehicles, such as hydrogen fuel cell cars, to be developed alongside electric vehicles, to achieve decarbonization goals. This approach is seen as more flexible and less likely to cause economic upheaval compared to a blanket ban on combustion engines.
Another concern revolves around the pace of developing comprehensive charging networks. Källenius believes that significant investment and time—potentially 10 to 15 years—are required to reach a satisfactory level. Additionally, the ban could lead to a rush of consumers buying petrol or diesel cars before the deadline, potentially causing a short-term negative impact on the environment without long-term benefits.
European manufacturers are also facing competition from Chinese companies, which could be exacerbated by the ban due to differing regulatory environments and market dynamics. The industry is dealing with fragile demand, supply chain disruptions, and trade tensions, making it challenging to meet the ambitious decarbonization targets.
Stellantis, the parent company of several major car brands, may be forced to shutter vehicle plants due to the risk of hefty EU fines for not complying with CO2 emission targets. The company's Europe chief, Jean-Philippe Imparato, has stated that without a regulatory rethink by year-end, Stellantis 'will have to make tough decisions' and may close factories if it fails to meet emissions rules.
The European Parliament's biggest lawmaker group is seeking amendments to the EU's policy regarding the ban on sales of new petrol and diesel cars during the evaluation period in the second half of 2025. Jens Gieseke, the EPP's negotiator on car policies, proposes changes such as allowing sales of combustion engine cars running on synthetic fuels and biofuels as well as plug-in hybrid vehicles beyond 2035.
The European Commission has so far resisted pressure to weaken the 2035 policy, citing the need for investment certainty. However, the concerns raised by manufacturers suggest that a balanced approach may be necessary to ensure a smooth transition to a more sustainable future while minimizing economic disruption.
[1] Stellantis may be forced to shutter vehicle plants due to the risk of hefty EU fines for not complying with CO2 emission targets. [2] Mercedes saw a 23% drop in EV sales last year, despite global EV sales rising 25%. [3] Mercedes has recently backtracked on its ambitious 2021 pledge to stop selling combustion cars 'where market conditions allow' by the decade's end. [4] Stellantis' Europe chief Jean-Philippe Imparato warned that unreachable targets to reduce CO2 emissions in the run-up to the 2035 ban on sales of combustion engines could force the company to close factories. [5] Mercedes will extend the availability of petrol and hybrid models beyond 2030. [6] Mercedes risks collapsing if the proposed ban is not reconsidered, according to Kaellénius. [7] Kaellénius called for a 'reality check' following the huge decline in EV sales seen in recent years. [8] The European Commission has so far resisted pressure to weaken the 2035 policy, citing the need for investment certainty. [9] Jens Gieseke, the EPP's negotiator on car policies, proposes changes such as allowing sales of combustion engine cars running on synthetic fuels and biofuels as well as plug-in hybrid vehicles beyond 2035. [10] The European Parliament's biggest lawmaker group is seeking amendments to the EU's policy regarding the ban on sales of new petrol and diesel cars during the evaluation period in the second half of 2025. [11] The EU's proposed ban on sales of combustion-engined cars in 2035 is up for review in the second half of 2025. [12] Stellantis earlier this year closed Vauxhall's 100-year-old Luton van factory, putting 1,100 jobs at risk, partly due to the UK Government's stringent EV sales targets via the Zero Emission Vehicle Mandate. [13] EU-based car manufacturers must sell more EVs to cut CO2 emissions or risk penalties as part of the bloc's efforts to meet air pollution targets. [14] Ola Kaellénius, CEO of Mercedes, has warned that the mandated switch to electric vehicles could send the industry 'at full speed against a wall.' [15] The European Union and other rule makers, including the UK Government, are being criticized for proposing a ban on sales of new petrol and diesel cars over the next decade.
