Auto Industry Challenges EU’s 2035 Combustion Engine Ban at Munich Auto Show
MUNICH, GERMANY – September 9, 2025 – A clear divide has emerged within the European automotive industry over the EU’s planned ban on the sale of new combustion engine vehicles in 2035, as automakers and national leaders publicly challenged the policy at the IAA MOBILITY 2025 auto show in Munich. Concerns over manufacturing costs,battery dependency on China,and the pace of EV adoption are fueling the push for a more flexible approach.
Last month, the European Automobile Manufacturers Association (ACEA) and the European Association of Automotive suppliers (CLEPA) informed European Commission President Ursula von der Leyen that EU manufacturers are facing “near-total dependency” on China for batteries, alongside uneven charging infrastructure and higher production costs exacerbated by U.S. tariffs.
The industry groups argued in a letter that achieving the EU’s stringent 2030 and 2035 CO2 targets is “simply no longer feasible” under current conditions. ”Legal mandates and penalties will not drive the transition,” the letter stated. ”evs will lead the charge, but there must also be space for plug-in hybrids, range extenders, highly efficient internal combustion engine vehicles, hydrogen and decarbonized fuels.”
Mercedes-benz CEO Ola kaellenius, who also heads ACEA, went further, demanding the EU’s CO2 plan be either scrapped or substantially revised. “We need a reality check. Otherwise, we are heading at full-speed against a wall,” Kaellenius warned, suggesting the European car market could “collapse” if the plan proceeds as scheduled.
The sentiment was echoed by Bavarian Minister-President Markus Soeder, who called for a “clear commitment to the automobile” in Germany, stating, “That includes stopping the EU ban on combustion engines. Accelerating technology for e-mobility and autonomous driving, reducing industrial electricity prices, and expanding charging infrastructure.”
Hildegard Mueller, President of the German Association of the Automotive Industry (VDA), emphasized the need to overcome “excessive regulation.” “Our goal must be to bring Germany back to the top of international competitiveness rankings…Versatility and technological openness are absolutely essential.Those who fail to analyze realities and act flexibly will not achieve their goals,” she said.
The debate comes as von der Leyen prepares to host European automotive sector executives on September 12th to discuss the future of the industry.
A coalition of automakers – including Volkswagen, BMW, and Stellantis - are backing Kaellenius’ call for change, supported by the governments of Germany, Italy, Poland, Czechia, and Hungary. Though, Renault and Tesla are advocating for maintaining the ban, alongside France, Spain, the Netherlands, Sweden, and Denmark.
Despite the policy debate, automakers are showcasing new EV models at the Munich show. Stellantis affiliate Leapmotor debuted the BO5,and BYD unveiled its Dolphin Surf. BMW is launching its iX3 SUV, the first vehicle built on its new Neue Klasse platform, while the new Mercedes GLC will provide competition. Chinese brands Chery’s Omoda and Jaecoo are also entering the European market with more mainstream EV offerings.
