Mercedes-Benz CEO Ola Kaellenius, in his role as president of the European Automobile Manufacturers’ Association (ACEA), urged the European Commission on Thursday to recognize that weak electric vehicle (EV) sales in the European Union are primarily due to sluggish demand rather than supply challenges. Kaellenius called on EU policymakers to reassess potential fines tied to CO2 emission targets, warning they could cost automakers up to €15 billion ($15.4 billion) by 2025.
“We have made a few suggestions, but we didn’t want to come in with a prescriptive ‘just do this,’” Kaellenius told reporters. “Let’s recognize there is an issue. Any type of relief that protects our investment capability is what we’re seeking.”
The ACEA reported a 5.9% decline in EV sales last year, with the segment’s market share falling to 13.6%—down from 14.6% in 2023—falling short of the 20% market share needed to meet EU emission targets. Kaellenius argued that the CO2 reduction goals were based on overly optimistic assumptions about EV demand. “Political leaders need to recognize the issue and come up with ideas,” he added.
Kaellenius also highlighted the broader challenges facing the automotive industry, including increased competition from Chinese EV manufacturers and potential U.S. tariffs. He urged the EU to bolster competitiveness by deepening its single market, stimulating research, and maintaining a commitment to free trade. “The EU needs to focus on boosting its competitiveness, and we must avoid a trade war,” he said.
As part of a strategic dialogue to support Europe’s automotive sector, Kaellenius called for collaboration between automakers, suppliers, and trade unions to address challenges, including job cuts. The dialogue is expected to begin in the coming weeks.