European car market faces collapse, Mercedes boss warns. Does the EU blindly regulate it's legendary auto brands to death?

[El Presidente]

The Korean and Japanese automakers have found the current environment tough enough. 

The Euro automakers are trying to do it with one arm tied behind their back by EU regulation. 

 

It is apparent globally that a  large part of the market wants nothing to do with an electric car.

Does the EU blindly regulate it's legendary auto brands to death? 

 

https://www.thetimes.com/business-money/companies/article/european-car-market-faces-collapse-mercedes-boss-warns-d58b6pzc3

European car market faces collapse, Mercedes boss warns

He claims the industry faces a ‘perfect storm’ of challenges, including a looming ban on petrol and diesel vehicles

 

Robert Lea

Monday August 11 2025, 4.34pm BST, The Times

Ola Kaellenius, the Mercedes chief executive, on a tour of the company’s plant in Rastatt

FLORIAN WIEGAND/GETTY IMAGES

 

The head of Mercedes-Benz has delivered an apocalyptic message on the future of the European car industry caught up in Chinese competition, Trump’s trade war tariffs, weak demand for luxury vehicles and regulatory diktats that carmakers stop making petrol and diesel vehicles by 2035.

Ola Kallenius, chief executive, said the outlook for carmakers was worse than a perfect storm.

“Our industry is experiencing heavy rain, hail, storms and snow at the same time,” Kallenius, 56, told the German newspaper Handelsblatt. “Car manufacturing is a tough business, more so than ever.”

 

Of the European Commission’s insistence that all carmaker’s produce only zero-emission vehicles within a decade, Kallenius said: “We need a reality check otherwise we are heading at full speed against a wall.”

He warned that Europe’s car market could collapse if Brussels went ahead with the planned timelines of its petrol and diesel ban.

 

His views carry particular weight as he is also president of the European Automobile Manufacturers’ Association, the Europe-wide equivalent of the British lobby group the Society of Motor Manufacturers and Traders.

There have been growing European industry demands for Brussels to look again at its proposed ban and Kallenius said that such a ban would simply hasten consumers into buying petrol or diesel cars before any deadline. “That doesn’t do the climate any good,” he said.

Kallenius, a Swede, who took over in 2019 as chief executive from his charismatic predecessor Dieter Zetsche, who latterly admitted that the company had used cheat devices to fool regulators over the carbon emissions of Mercedes cars, has previously been a standard-bearer for the company’s investment in low and zero-emission vehicles.

He said, however, in the Handelsblatt interview: “Of course we have to decarbonise but we must not lose sight of our economy.” He said legislators had to use tax incentives and lower power prices at charging stations to encourage the switch to electric cars.

He said that Mercedes and the European car industry were under a multi-pronged attack. “The environment in which we operate is extremely complex at the moment,” he said, citing not least the impact of US trade tariffs, which are slapping a 15 per cent surcharge on European Union exports across the Atlantic.

He said the increasingly intense competition from Chinese exports into Europe was Darwinian.

Of the luxury market in which Mercedes plays, he said: “Consumer sentiment in the high-end segments important to us has been very subdued for several years, to put it mildly.”

His comments on the electric car market were criticised by a leading voice in the European zero-emission vehicle lobby. “Now is not the moment for Europe to step back from its 2035 target but to lead decisively on the electric vehicle transition,” Chris Heron, secretary-general of E-Mobility Europe, said.

“Any delay or dilution will see China and others surge further ahead. With electric car sales already accelerating across 2025, the EU must hold its course and give investors certainty while stepping up industrial and demand policies: driving EV roll-out, expanding charging and scaling-up battery supply chains.”

The head of Mercedes-Benz has delivered an apocalyptic message on the future of the European car industry caught up in Chinese competition, Trump’s trade war tariffs, weak demand for luxury vehicles and regulatory diktats that carmakers stop making petrol and diesel vehicles by 2035.

Ola Kallenius, chief executive, said the outlook for carmakers was worse than a perfect storm.

“Our industry is experiencing heavy rain, hail, storms and snow at the same time,” Kallenius, 56, told the German newspaper Handelsblatt. “Car manufacturing is a tough business, more so than ever.”

 

Of the European Commission’s insistence that all carmaker’s produce only zero-emission vehicles within a decade, Kallenius said: “We need a reality check otherwise we are heading at full speed against a wall.”

He warned that Europe’s car market could collapse if Brussels went ahead with the planned timelines of its petrol and diesel ban.

[BrightonCorgi]

EU would rather see a total collapse of the all storied Euro marques than acquiesce on their virtue signaling. "It was meant to be, but we did it for the environment" is their mantra when there is no industry left.

[cnov]

Have we not just hit a point where the customer is realising the prices are insane? In 2017, a 335d estate would set you back around £46k brand new. That car albeit a 340d, was around £65k in 2024. We got royally f****d on prices, £65k for a family estate is bonkers, who is going to go for that? 

The EU car industry is pissing and moaning about going electric and the Chinese have waltzed in with a handful of cheap electric cars that no one can really compete with. I'm seeing more and more of them in the UK. I'd definitely be worried if I was a legacy car manufacturer. The right wing papers are bashing electric cars so hard that these manufacturers have actually started to believe that people don't want them, it's like they've fallen for their own propaganda.

[chasy]

The world is crazy. Hopefully we are healing a bit.

[rcarlson]

Predictable AF.  

[bmac]

Grow a pair and buy a big gas guzzling 4WD.

[99call]

Looking at the repulsive state of the World, I've been scratching my head wondering who the culprit was? At last,..........Europe! I knew It! It wasn't obvious at first, but thank god we've caught the bad guys.

If there's one thing that makes me despair with man's inhumanity to man...it's regulations.

 

[El Presidente]

 

 

[ha_banos]

These regulations meant our car no longer has parallel parking. It can park into a car parking bay! But no not parallel parking allowed. Pffft.

[Fugu]

It’s always hard to accept when your main asset, your core expertise is no longer being in demand. Disruptive technology, creative destruction anyone? Are we still using analogue cameras or push-button phones? (well, I do, but not as the main device 😅)

Let’s face it, one of their biggest markets has been and currently still is China. The Chinese are stopping buying their cars - and that’s not because of any political intervention. That’s because of a different understanding of comfort and luxury. Us old geezers, we may like it or not, for the younger generation cars become IT-appliances, their power train will only be playing a minor role when looking into the future, when all go electric. It’s in fact no longer a matter of ‘fossil’ or ‘renewable’.

[99call]

4 hours ago, ha_banos said:

These regulations meant our car no longer has parallel parking. It can park into a car parking bay! But no not parallel parking allowed. Pffft.

You think that's bad? Due to bureaucratic wattage restrictions on vacuums my cleaning girl can no longer successfully remove the fine silt dirt sitting in the deep pile of our Persian rugs. I had to get her out on the drive with grandad's old tennis racket. She was out there for hours (I was supervising from the balcony). Even though her backhand was woeful, she's seemed to be making some headway when.... SNAP, she broke the racket! Now, though I gave her the racket, in no way did I want it broken, and after a quick google search I found a fair auction value and informed her I would be docking it from here pay, but that I would kindly allow her to keep the broken racket if she wanted to get it restored. 

She turns around and tells me that due the some nonsense in the ECHR, that I wasn't allowed to dock her wages. I go on to give a mouthful of abuse, which she informed me is also not allowed!!! The world has gone mad.