Auto Industry Challenges EU’sโค 2035 Combustion Engine Ban at Munich Auto Show
MUNICH, GERMANY – September 9, 2025 โ – A clear divide has โemerged within the โEuropean โautomotive industry โฃover the EU’s โคplanned ban โon the sale ofโค new combustion engine vehicles in โข2035, as automakers andโ national leaders publicly challenged theโค policy atโข the IAAโฃ MOBILITY 2025 auto show in โฃMunich. Concerns over manufacturing costs,battery dependency on China,and the pace โof EV adoption are fueling the push for aโฃ more flexible approach.
Last โmonth, the European Automobile Manufacturers Association โ(ACEA) and the European Association ofโ Automotive suppliers (CLEPA) informed โEuropean Commission President Ursula von der Leyen โขthat EU manufacturersโข are facing “near-total dependency” on China for โbatteries, alongside uneven charging infrastructureโค and higherโฃ production costs exacerbated by U.S.โ tariffs.
Theโข industry groups argued in a letter that achieving the EU’s stringent 2030 and 2035 CO2 targets is “simply no โขlonger feasible” under current conditions. โข”Legal โmandates and penalties will not drive the transition,” the letter stated. โ”evs will lead the charge, but thereโค must alsoโค beโ space for plug-in hybrids, range extenders, highly efficient internal combustion engine vehicles,โ hydrogen and โขdecarbonized fuels.”
Mercedes-benz CEO Ola kaellenius, who also heads ACEA, โฃwent further, demanding the EU’s CO2 plan be either scrapped or substantially revised. “We need aโ realityโฃ check. Otherwise, we โare heading at full-speed against a โฃwall,” Kaellenius warned, suggesting the โขEuropean โcar โmarket could “collapse”โ if the plan proceeds as scheduled.
The sentiment wasโฃ echoed by Bavarian Minister-President Markus Soeder, who calledโ for a “clear commitment to the automobile” in โฃGermany, stating, “That includes stopping โthe EU ban on combustion engines. Accelerating โtechnology for e-mobility and autonomous driving,โค reducing industrial electricity prices, โand expanding charging infrastructure.”
Hildegard โคMueller,โ President of the German Associationโค of the โAutomotive Industry (VDA), emphasized the needโข to overcome “excessive regulation.” “Ourโ goal โmust be to bring Germany back to the top of international competitiveness rankingsโฆVersatilityโฃ and technological openness are absolutely essential.Those โฃwho fail to analyze realities and act flexibly will โขnot achieve their goals,” she said.
The debate comes โasโฃ von der Leyenโค prepares to host European automotive sector executives on September 12thโ to discuss the โขfuture of the industry.
A coalition ofโค automakersโฃ – includingโ Volkswagen,โฃ BMW, and Stellantis โ- are backingโ Kaellenius’ call for change, supported by the governments of Germany, Italy, Poland, Czechia,โฃ and Hungary. Though, Renault โand Tesla are advocating โคfor maintaining โขthe ban, alongside France, Spain, theโฃ Netherlands, Sweden, and โDenmark.
Despite the policy debate,โค automakers are showcasing new โคEV โขmodels 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 โnew Neue Klasseโค platform,โ whileโฃ the new Mercedes GLCโฃ will provideโค competition. โ Chinese brands Chery’s Omoda โคand Jaecoo are also enteringโข the European market with more mainstreamโ EV โofferings.