Published by Global Banking & Finance Review®
Posted on January 29, 2026
2 min readLast updated: January 29, 2026
Add as preferred source on GoogleMercedes CEO warns that EU's relaxed EV targets may negate benefits, impacting market dynamics and sustainability goals.
STUTTGART, Jan 29 (Reuters) - The fine print of the European Union's relaxed targets in the shift to electric cars risks cancelling out the intended benefits, the CEO of Mercedes-Benz said on Thursday.
The European Commission made public proposals in December that reverse an effective ban on sales of new internal combustion engine cars from 2035, bowing to pressure from Germany, Italy and major automakers including Mercedes.
"The door has been opened slightly for now," Mercedes CEO Ola Kaellenius said in Stuttgart ahead of the launch of the premium carmaker's revamped S-class series, with which it hopes to regain momentum after a difficult 2025.
But the restrictions could cancel out the benefits, Kaellenius, who also serves as president of the ACEA European automotive association, told reporters.
Automakers will still be able to sell plug-in hybrids and range extenders beyond an initial cut-off date of 2035, while making up the CO2 reduction shortfall with lower-carbon steel and the use of more sustainable fuels.
The plan, which requires EU member states' approval, also foresees binding electrification targets for corporate fleets based on GDP per capita.
"There is a great risk that the market will shrink on the way there," Kaellenius said.
(Reporting by Ilona Wissenbach, Writing by Rachel More, Editing by Alexander Smith)
An electric vehicle (EV) is a type of vehicle that is powered by electricity instead of traditional fuels like gasoline or diesel. EVs are known for being more environmentally friendly and reducing carbon emissions.
A plug-in hybrid is a vehicle that combines a conventional internal combustion engine with an electric motor. It can be charged from an external power source and typically has a longer electric-only range than standard hybrids.
The European Commission is the executive branch of the European Union (EU) responsible for proposing legislation, implementing decisions, and managing the day-to-day operations of the EU.
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