EU Automakers Warn: Ban on Fuel Vehicles No Longer Feasible

According to foreign media reports, European car manufacturers have recently stated that the EU's planned ban on the sale of fuel vehicles is no longer practically feasible, and warned that the relevant policy may weaken the automotive industry in the EU region and its supplier network.

The heads of major lobbying groups in the European automotive industry have jointly written to European Commission President Ursula von der Leyen, urging a reassessment of the plan to phase out internal combustion engine vehicles by 2035. The joint letter points out that China’s dominance in the electric vehicle supply chain, as well as the newly implemented tariff and trade barriers in the United States, are posing new challenges to the implementation of this plan.

Image source: Mercedes-Benz

Ola Källenius, Chairman of the European Automobile Manufacturers’ Association, and Matthias Zink, Chairman of the European Association of Automotive Suppliers, stated in a letter: "The transformation plan of the European automotive industry can no longer remain at the level of idealism, but must face the current industrial situation and geopolitical realities."

Källenius also serves as the CEO of Mercedes-Benz Group, while Zink is a senior executive at Schaeffler Group. In their letter, the two emphasized: "In the current environment, achieving the carbon dioxide reduction targets for 2030 and 2035 is simply no longer feasible."

The recent public statements by European car manufacturers highlight the growing contradiction between Europe's environmental ambitions and the economic pressures faced by the region's largest manufacturing sector. Although European car companies have launched dozens of electric vehicle models, electric vehicles currently account for only about 15% of total car sales in Europe, with significant differences in the adoption rates of electric vehicles among member countries.

Currently, most of the revenue for European car manufacturers still comes from fuel-powered vehicles, especially high-margin SUVs and luxury sedans. This situation highlights the significant challenges that car companies face in rapidly transitioning to electrification. Automotive parts suppliers are also under pressure: companies like Continental AG have initiated layoffs, while Valeo SE has issued profit warnings due to cooling demand for electric vehicles and rising financing costs. Analysts expect this pressure to drive more restructuring across the entire automotive supply chain.

As of now, EU policymakers still insist on the goal of banning the sale of fuel-powered cars by 2035, stating that it is crucial for achieving climate targets. Environmental organizations also believe that car manufacturers' warnings are exaggerated, noting that electric vehicle sales are steadily increasing and that a number of new battery production projects have emerged in Europe.

After years of debate, the EU's plan to ban the sale of fuel-powered cars by 2035 was finally approved by a narrow margin. Countries such as France and the Netherlands have already begun adjusting their national policies to align with this plan.