The fine print of the European Union’s relaxed targets for the shift to electric cars risks undermining the intended benefits of the policy, the chief executive of Mercedes-Benz said on Thursday, as Brussels reconsiders its approach to ending sales of new combustion-engine vehicles.
The European Commission in December published proposals that would roll back an effective ban on the sale of new internal combustion engine cars from 2035, following pressure from Germany, Italy and major automakers including Mercedes-Benz. The changes would allow manufacturers greater flexibility in meeting emissions targets beyond the 2035 deadline.
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“The door has been opened slightly for now,” Mercedes-Benz CEO Ola Kaellenius said in Stuttgart ahead of the launch of the premium carmaker’s updated S-Class range, which the company hopes will help restore momentum after a challenging 2025. Kaellenius cautioned, however, that the added flexibility could dilute the policy’s impact. “There is a great risk that the market will shrink on the way there,” he said.
Under the revised framework, automakers would still be able to sell plug-in hybrids and vehicles with range extenders beyond 2035, while compensating for shortfalls in carbon dioxide reductions through measures such as the use of lower-carbon steel and more sustainable fuels. Kaellenius, who also serves as president of the ACEA, said such provisions could cancel out the expected benefits of stricter emissions rules.
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The proposals, which still require approval from EU member states, also include binding electrification targets for corporate vehicle fleets linked to national income levels. Industry executives have warned that uneven implementation across countries could distort competition and slow the pace of electrification, even as policymakers seek to balance climate goals with industrial competitiveness.
