Published by Global Banking & Finance Review®
Posted on August 11, 2025
2 min readLast updated: January 22, 2026
Add as preferred source on GoogleMercedes CEO criticizes EU's 2035 combustion engine ban, warning it could harm the car market. He suggests tax incentives for electric vehicles.
BERLIN (Reuters) -The CEO of Mercedes-Benz criticised the European Union's plan to ban CO2-emitting vehicles from 2035 in a media interview on Monday, joining a chorus of voices calling the target into question as it comes up for review this year.
The ban, which supporters say is crucial to Europe's green ambitions, is up for review in the second half of 2025, with critics saying it would handicap European carmakers already struggling with weak demand, Chinese competition and disappointing electric vehicle sales.
"We need a reality check. Otherwise we are heading at full speed against a wall," Mercedes CEO Ola Kaellenius told the Handelsblatt business daily of the 2035 goal, adding that Europe's car market could "collapse" if it goes ahead.
Kaellenius 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.
"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," Kaellenius said.
(Reporting by Rachel More, Editing by Miranda Murray)
Mercedes CEO Ola Kaellenius criticized the EU's plan to ban CO2-emitting vehicles by 2035, stating that a reality check is needed to avoid heading towards economic challenges.
Kaellenius suggested that consumers might rush to purchase petrol or diesel cars before the ban takes effect, which could undermine the intended goals of the legislation.
He called for tax incentives and lower power prices at charging stations to facilitate the transition to electric vehicles in a more balanced manner.
The ban is set for review in the second half of 2025, allowing for potential adjustments based on market conditions and technological advancements.
He emphasized the need for a technology-neutral approach to decarbonisation, ensuring that economic considerations are not overlooked in the transition to greener vehicles.
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