EUROPE’S car industry is “heading at full speed against a wall” and risks collapsing if the EU doesn’t rethink its ban on new petrol and diesel cars, the boss of a huge car firm has warned.
In a stark intervention, he said a “reality check” was needed before the 2035 ban on combustion-engine sales is locked in.
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Mercedes-Benz boss Ola Källenius told German business paper Handelsblatt: “We need a reality check. Otherwise, we are heading at full speed against a wall.
“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.”
The luxury brand — once gung-ho about going fully electric in Europe — has already dropped its ambitious 2021 pledge to stop selling combustion cars “where market conditions allow” by the decade’s end.
Källenius, who also heads the European Automobile Manufacturers’ Association (ACEA), now warns the EU’s policy could trigger a last-minute rush for petrol and diesel cars before the cut-off, which “doesn’t help the climate at all.”
Electric cars remain far from dominating the market.
In the first half of this year, EVs made up just 17.5 per cent of sales across the EU, UK, and EFTA countries, while plug-in hybrids took 8.7 per cent.
Traditional hybrids accounted for 35 per cent, but that figure includes mild-hybrids, which critics say aren’t “true” hybrids.
Mercedes’ own figures show EV sales slipping — just 8.4 per cent of its global deliveries in the first six months of 2025, down from 9.7 per cent last year.
Even with plug-ins included, electrified models made up just 20.1 per cent of shipments.
The EU’s 2035 ban is due for review in the coming months, but Brussels has so far signalled no U-turn, reiterating in March its commitment to zero-emission new cars by the mid-2030s.
It comes as the boss of Stellantis — the giant behind 14 brands including Fiat, Peugeot, and Maserati — warned that unreachable EU CO2 targets could force plant closures.
Europe chief Jean-Philippe Imparato said the Franco-Italian group faces fines of up to €2.5 billion within “two-three years” if it fails to meet emissions rules.
Without a regulatory rethink by year-end, “we will have to make tough decisions,” he told a 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 warning comes amid fresh turmoil for Stellantis, with its new CEO Antonio Filosa inheriting the fallout from Donald Trump’s 25 per cent US import tariffs and a crisis at Maserati, which has seen sales plunge from 26,600 in 2023 to 11,300 last year.
With EV targets biting, petrol and diesel models under threat, and luxury brands cancelling investments — including Maserati’s £1.3bn electric MC20 Folgore — Europe’s car bosses are sending a clear signal to Brussels: ease off, or risk slamming the brakes on the continent’s auto industry.
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