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European carmakers said the European Union’s planned ban on combustion engines is no longer realistic, warning that climate rules risk weakening the region’s auto industry and its supplier network.
In a letter, leaders of the industry’s main lobby groups urged European Commission President Ursula von der Leyen to revisit plans to phase out fossil fuel-powered vehicles by the mid-2030s, arguing China’s dominance of the electric-vehicle supply chain and new US trade barriers pose fresh hurdles.
“Europe’s transformation plan for the auto industry must move beyond idealism to acknowledge current industrial and geopolitical realities,” European Automobile Manufacturers’ Association President Ola Källenius and European Association of Automotive Suppliers President Matthias Zink said in the letter.
“Meeting CO2 targets for 2030 and 2035 is, in today’s world, simply no longer feasible,” said Källenius, who is also the chief executive officer of Mercedes-Benz Group AG, and Zink, a senior executive at Schaeffler AG.
The intervention highlights growing tension between Europe’s climate ambitions and the economic strains gripping its biggest manufacturing sector. Automakers have rolled out dozens of electric models, but battery-powered vehicles still make up only about 15% of sales, with uneven adoption across the bloc.
Carmakers continue to generate most of their earnings from combustion-engine models, especially high-margin SUVs and premium cars, underscoring the challenge of a rapid pivot. Suppliers are also under pressure, highlighted by companies such as Continental AG cutting jobs and Valeo SE warning on profitability as EV demand cools and financing costs climb — a squeeze that analysts expect will spur more restructuring across the supply chain.
EU policymakers have so far defended the 2035 target as essential to meeting climate goals. Environmental groups argue industry warnings are exaggerated, pointing to steady growth in EV sales and a wave of new European battery projects.
The ban was narrowly approved in Brussels after years of debate, with countries including France and the Netherlands already aligning national policies with it.
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