Mercedes CEO Warns EU’s Revised EV Rules May Undermine Climate Goals

Mercedes-Benz CEO Ola Kaellenius warns that fine print in the EU’s relaxed 2035 electric vehicle mandate could negate environmental benefits, potentially shrinking the EV market during transition. The European Commission’s December proposal allows continued sales of plug-in hybrids and range extenders post-2035, offsetting CO2 shortfalls via low-carbon steel and sustainable fuels. Corporate fleet electrification targets will be tied to GDP per capita, pending member state approval. Kaellenius, also president of ACEA, said “the door has been opened slightly,” but cautioned that regulatory complexity risks stalling momentum. Mercedes aims to rebound in 2026 with its revamped S-Class amid challenging market conditions.