Boss at major German car maker calls for ‘reality check’ on EV switch

The boss of one of Germany’s biggest and most influential car makers has warned that the mandated switch to electric vehicles being forced on manufacturers is sending the industry ‘at full speed against a wall’ in an explosive criticism aimed at the EU.

Ola Källenius, chief executive of Mercedes, said the industry risks collapsing if the European Union and other rule makers – including the UK Government – do not reconsider the proposed ban on sales of new petrol and diesel cars over the next decade.

Källenius, during a media interview, joined a chorus of voices from within the motor sector calling into question the 2035 target to oust combustion engine models from showrooms.  

He called for a ‘reality check’ following the huge decline in EV sales seen in recent years, which has triggered a number of manufacturers to announce U-turns on their electric car strategies in 2025.

Mr Källenius told German business paper Handelsblatt: ‘Of course, we have to decarbonise, but it has to be done in a technology-neutral way. 

‘We must not lose sight of our economy.’

Mercedes CEO Ola Källenius said the industry risks collapsing if the European Union and other rule makers – including the UK Government – do not reconsider the proposed ban on sales of new petrol and diesel cars over the next decade

The luxury car firm – which has built one of the biggest EV model line-ups across the industry – has recently backtracked on its ambitious 2021 pledge to stop selling combustion cars ‘where market conditions allow’ by the decade’s end.

Earlier this year, it announced that it will extend its availability of petrol and hybrid models beyond 2030.

Källenius said the brand will run a revised dual-powertrain strategy, keeping combustion engines on the road longer than planned, telling Auto Motor und Sport: ‘Electrified high-tech combustion engines will run longer than we originally expected’.

Mercedes saw a 23 per cent drop in EV sales last year, despite global EV sales rising 25 per cent to 17 million.

Describing the new direction as a ‘course correction’, Källenius pointed to slow EV take-up in some areas and general market conditions as reasons why ‘the most rational approach is for an established manufacturer to do both and not neglect either technology.’

The EU’s proposed ban on sales of combustion-engined cars in 2035, which it deems crucial to Europe’s green ambitions, is up for review in the second half of 2025, with critics saying it would handicap European car makers already struggling with weak demand, Chinese competition and disappointing electric vehicle sales.

Kaellenius, speaking this week, argued that consumers would simply hurry to buy cars with petrol or diesel engines ahead of the ban.

Currently serving as head of the European auto lobby ACEA, the German auto boss has instead called for tax incentives and cheap power prices at charging stations to encourage the switch to electric cars. 

‘We need a reality check. Otherwise we are heading at full speed against a wall,’ he said.

In the first half of this year, EVs made up just 17.5 per cent of sales across the EU, UK, and EFTA (European Free Trade Association) countries.

And Mercedes has already seen an 8.4 per cent dip in EV global deliveries in the first six months of this year – a comparison plotted against a decelerating sales performance posted in 2024.

Källenius warned the motor industry is  ‘heading at full speed against a wall’ in an explosive criticism aimed at the EU as he called for a ‘reality check’ on green targets

Mercedes has recently backtracked on its ambitious 2021 pledge to stop selling combustion cars ‘where market conditions allow’ by the decade’s end

Mercedes has formed one of the largest line-ups of EVs across its dedicated ‘EQ’ range in recent years but has seen a decline in global deliveries as demand for electric cars hasn’t accelerated at the pace many had expected

The ban on sales of new petrol and diesel cars in the EU is up review in the second half of 2025.

The European Parliament’s biggest lawmaker group is seeking amendments to the EU’s policy during this evaluation.

Jens Gieseke, the centre-right European People’s Party’s (EPP) negotiator on car policies, in March said it will propose changes such as allowing sales of combustion engine cars running on synthetic fuels and biofuels as well as plug-in hybrid vehicles beyond 2035.

‘It was a mistake to ban the combustion engine,’ said Gieseke. 

‘If fuels lead to a less carbon-intensive footprint, this should be recognised.’

The European Commission – whose president, Ursula von der Leyen, belongs to the EPP – has so far resisted pressure to weaken the 2035 policy, which it says provides investment certainty.

However, car makers are showing their concerns about the planned transition with their own delays to EV commitments and the release of new battery-powered vehicles.

The most recent of these is European car giant, Stellantis. which is the parent company of 14 major brands including Citroen, Fiat, Peugeot, and Vauxhall.

Stellantis – the parent company of massive brands including Citroen, Fiat, Peugeot and Vauxhall to name just a few – said it may be forced to shutter vehicle plants due to the risk of hefty European Union fines levied for not complying with CO2 emission targets

European head of the Franco-Italian auto maker Jean-Philippe Imparato (former CEO of Alfa Romeo) says 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

Its boss has warned that ‘unreachable’ targets to reduce CO2 emissions in the run-up to the 2035 ban on sales of combustion engines could force it to close factories.

Europe chief Jean-Philippe Imparato said the Franco-Italian group faces fines of up to €2.5billion within ‘two-three years’ if it fails to meet emissions rules.

Without a regulatory rethink by year-end, he said Stellantis ‘will have to make tough decisions’ while speaking during conference in Rome.

‘I have two solutions: either I push like hell (on electric)… or I close down ICE (internal combustion engine vehicles).

‘And therefore I close down factories,’ he said, pointing to the risk for sites such as Stellantis’ van plant in Atessa, Italy.

The automotive powerhouse earlier this year closed Vauxhall’s 100-year-old Luton van factory, putting 1,100 jobs at risk. 

When it announced the move in November, it partly attributed the decision to the UK Government’s stringent EV sales targets via the Zero Emission Vehicle Mandate.