EU Must Reconsider 2030 Transition Targets

• Mercedes CEO Ola Källenius wrote an open letter to the EU, urging the organization to reexamine its 2030 green transition targets.

Mercedes-Benz CEO Ola Källenius doubts the viability of the European Union’s (EU) current policies toward the automotive industry. In his capacity as president of the European Automobile Manufacturers’ Association (ACEA), together with European Association of Automotive Suppliers (CLEPA) President Matthias Zink, he wrote an open letter on Tuesday to European Commission President Ursula von der Leyen to reevaluate the practicality of the EU’s green transition targets for 2030.

The group highlighted that it still supports the EU’s net-zero goal by 2050. However, it highlighted that the automotive landscape has changed since the EU crafted its carbon-neutral roadmap for 2030. The Mercedes CEO called for “more pragmatism and flexibility” in handling things to ensure the sustainable growth of the European auto industry along the way.

Mercedes CEO Cites Supply Chain Issues as Major Hurdle in Meeting EU Goals

One of the issues Källenius cited as a significant hurdle in keeping up with the EU’s 2030 target is the ongoing supply chain issues in sourcing components. He admitted that the European automotive industry faces “near-total dependency” on Asia for electric vehicle (EV) batteries. He pointed out that automakers within the jurisdiction constantly grapple with rising production costs to meet EU standards.

The exec cited rising electricity prices, uneven distribution of charging infrastructure, and tariffs with trade partners as factors that the EU must consider in its next discussion with key stakeholders in the auto industry. Additionally, he claimed that most customers are still wary of leaping into alternative powertrains outside of the conventional fossil fuel-fed cars.

Källenius urged the EU to introduce more incentives to manufacturers and consumers to balance out the demand side of the market. Furthermore, he said he looks forward to discussing more of the auto industry’s concerns with the EU in their next strategic dialogue.