Finance
Mercedes CEO says details of EU's relaxed EV targets could negate benefits
Published by Global Banking and Finance Review
Posted on January 29, 2026
2 min readLast updated: January 29, 2026
Quick Summary
Mercedes CEO warns that EU's relaxed EV targets may negate benefits, impacting market dynamics and sustainability goals.
Mercedes CEO Warns EU's EV Target Changes May Undermine Benefits
Impact of EU's Relaxed EV Targets
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.
Concerns Over Market Shrinkage
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.
Details of the Proposal
"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.
Future of Automakers and EVs
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)
Key Takeaways
- •Mercedes CEO warns EU's relaxed EV targets could negate benefits.
- •EU proposals reverse the ban on internal combustion engine cars.
- •Automakers can sell hybrids beyond 2035 with sustainable practices.
- •Binding electrification targets for corporate fleets are proposed.
- •Market shrinkage is a potential risk during the transition.
Frequently Asked Questions about Mercedes CEO says details of EU's relaxed EV targets could negate benefits
1What is an electric vehicle?
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.
2What is a plug-in hybrid?
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.
3What is the European Commission?
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.
