Europe Car Bosses Tout EVs, Warn Against Combustion-Engine Ban
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European car executives are walking a fine line at this week’s Munich auto show: Touting how swell their new electric vehicles are while on the other hand warning Brussels that they can’t possibly sell only EVs in 10 years’ time.
Their message — however conflicting — is meant to pile pressure on the European Union to walk back a plan to phase out new combustion-engine cars by 2035. Top managers from Volkswagen AG, Mercedes-Benz Group AG and Stellantis NV on Sept. 8 spoke out against the ban as they grapple with a stagnant European car market, uneven demand for EVs and intensifying competition from Chinese manufacturers, led by BYD Co.
“It is unrealistic to expect to have 100% electric vehicles by 2035,” Volkswagen CEO Oliver Blume told journalists at the show, shortly after the company had paraded several new EVs in front of reporters. “I am strongly advocating for reality checks.”
The lobbying sets up a high-stakes showdown between Europe’s industrial heavyweights and policymakers over how quickly the bloc can decarbonize. It comes ahead of a Sept. 12 summit between European Commission President Ursula von der Leyen and industry leaders.
German Chancellor Friedrich Merz, whose party has been critical of the phaseout, on Sept. 9 lent his support to the industry’s demands, calling on Brussels to remain open to several technologies as it tries reduce transport emissions.
“We are, of course, committed to the transition to electric mobility,” Merz said in a speech at the Munich show. “But we need more flexibility in regulation.”
For automakers, the looming ban threatens upheaval across supply chains that employ millions and are central to national economies from Germany to France and Italy. For regulators, any retreat risks undercutting the EU’s climate credibility and putting the region even further behind China in rolling out EVs.
Mercedes CEOOla Källenius urged action: "We are very convinced that doing nothing is not an option.” (Alex Kraus/Bloomberg)
“Now is the time to do an inventory of what in the policymaking has worked, and what needs to be adjusted,” Mercedes CEO Ola Källenius told Bloomberg. “We are very convinced that doing nothing is not an option.”
Automakers are pressing the Commission to allow sales of cars that use technologies like range extenders — small combustion engines that recharge a car’s battery — for longer, and to maintain subsidies and regulatory flexibilities for hybrids.
They also want sustained purchase incentives for EVs and less onerous safety rules for smaller models. Such measures, executives argue, would give consumers and suppliers more time to adapt while helping Europe’s manufacturers stay competitive with rivals abroad.
The 2035 deadline is “not achievable,” said Stellantis’ European head, Jean-Philippe Imparato.
EU officials and environmental advocates counter that watering down the 2035 target would jeopardize the bloc’s climate goals and send confusing signals to investors. They argue the phaseout is essential to accelerate clean-tech investment and curb Europe’s reliance on imported fossil fuels.
The Polestar 5 electric vehicle during a launch event in Munich. (Krisztian Bocsi/Bloomberg)
All eyes now turn to the Sept. 12 meeting in Brussels, where automakers and parts manufacturers will take turns to lay out their list of concerns to von der Leyen. While aides insist the 2035 deadline remains intact, officials have hinted at possible compromises on transitional technologies — setting the stage for a contentious showdown with industry chiefs.
The Commission has started a review of the auto sector targets for 2030 and 2035 and is expected to propose any changes next year.
The debate is carrying extra pertinence as the EU works out how much further to push its climate ambition. Countries are divided on a proposal by the Commission to cut emissions by 90% by 2040, and France is among countries pushing to discuss the issue at the leaders level next month.
What to do about climate targets for the auto sector is likely to feature heavily in that debate, with Italy pushing for a carveout for biofuels as a condition of its support for the 2040 goal.
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