Automakers are on a collision course unless the EU changes direction
Just a few years ago, Mercedes-Benz was ready to go all-in on electric vehicles in Europe. In 2021, it aimed to phase out combustion-engine sales by 2030 “where market conditions allow.” Now, that plan is scrapped—and CEO Ola Källenius warns that without ICE vehicles, Europe’s auto industry could “collapse.”
Speaking to Handelsblatt, Källenius said the EU’s planned 2035 ban on new combustion-engine cars risks economic disaster: “We need a reality check. Otherwise, we are heading at full speed against a wall. Decarbonization must be technology-neutral—we can’t lose sight of our economy.” He also predicted a pre-ban rush for gas and diesel cars, which he argues would do little for the climate.
Current sales figures highlight the challenge. In the first half of 2025, EVs made up only 17.5% of new car sales in the EU, UK, and EFTA countries. Plug-in hybrids held 8.7%, while traditional and mild hybrids accounted for 35%. For Mercedes, EVs represented just 8.4% of global sales in the same period, down from 9.7% a year earlier; even including PHEVs, electrified models reached only 20.1%.
The EU’s 2035 ban is up for review soon, though the European Commission recently reaffirmed its commitment to zero-emission new cars from mid-decade. Still, growing opposition raises the possibility that PHEVs—or even full hybrids—could survive beyond 2034.
