Mercedes Left Behind as Peers Race Ahead
A new analysis from Transport & Environment (T&E) paints a striking picture: nearly every major European automaker is on track to meet EU CO₂ emission targets for 2025–2027. All, that is, except Mercedes-Benz. According to T&E, Mercedes exceeds the permitted CO₂ emissions by an average of 10 grams per kilometer. To put that in context, rivals like BMW, Renault, Stellantis, and Volkswagen are either comfortably within the limits or even outperforming the requirements.
To avoid eye-watering EU fines, Mercedes will likely have to fall back on ‘CO₂ pooling.’ This means buying emissions allowances from brands like Volvo Cars or Polestar—hardly the badge of green honor Mercedes would hope for.
Relaxed Rules, Reluctant Progress
It’s particularly ironic, as the European Commission recently cut the automotive industry a break: the original CO₂ deadline was 2025, but it’s now been pushed to 2027. While leading automakers and industry insiders welcomed the extension, critics argue it’s slowing the shift to electric mobility and putting Europe’s climate goals at risk.
Meanwhile, the EV revolution in Europe is picking up pace. Sales of fully electric vehicles surged by 38% in the first half of 2025. Yet T&E warns that this momentum could stall. Thanks to the delayed regulations, they predict about two million fewer EVs will be sold between 2025 and 2027. The main culprit? Price gaps between EVs and traditional combustion cars, which sometimes stretch to a whopping 30 to 40 percent.
Bright Spots for EVs: Batteries and Charging
It’s not all doom and gloom—there are some positive developments keeping Europe plugged in to the green transition:
- Battery prices are falling even faster than expected: A projected drop of 27% by the end of 2025, and a further 28% by 2027, could soon make electric cars much more affordable.
- The charging network now covers 77% of Europe’s highways, and nearly every EU country has already met or exceeded its 2025 charging infrastructure goals.
So, the wind appears to be at Europe’s back—at least for now.
Keep Up or Lose Out: The Global Race Is On
T&E insists that the pressure on automakers needs to stay high. As Lucien Mathieu, managing director at T&E, puts it:
“Anyone who thinks China will stop innovating is living in a dream world. If Europe keeps delaying, we’ll lose ground again in a crucial industry.”
And the numbers don’t lie. China now claims more than 30% market share in battery electric vehicles (BEVs)—and countries like India, Mexico, and Thailand are also ramping up their EV ambitions. Unless Europe sticks to stringent targets, it’s in danger of being outpaced.
For now, Mercedes-Benz stands out as the only major European carmaker likely to miss CO₂ goals. This is happening even as battery prices drop and charging networks expand—factors that should be giving the industry a much-needed boost. But with more relaxed deadlines, the pressure is off, and that’s a risk T&E doesn’t think Europe can afford:
This is no time to slow down. If the EU wants to reach zero-emission mobility, it must stay the course.
John is a curious mind who loves to write about diverse topics. Passionate about sharing his thoughts and perspectives, he enjoys sparking conversations and encouraging discovery. For him, every subject is an invitation to discuss and learn.
