Only a few years ago, Mercedes-Benz was confident about going all-in on electric vehicles in Europe. In 2021, it projected that by the end of the decade, it would stop selling cars with combustion engines “where market conditions allow.” Not only has the luxury brand dropped this ambitious goal, but it has also taken a 180-degree turn. Without ICE vehicles, the company’s head honcho believes the local automotive industry will “collapse.”

In an interview with the German business newspaper Handelsblatt (subscription required), Ola Källenius warned that if the EU’s sales ban on new combustion-engine cars remains in place for 2035, Europe’s automotive industry will implode:

‘We need a reality check. Otherwise, we are heading at full speed against a wall. Of course, we have to decarbonize, but it has to be done in a technology-neutral way. We must not lose sight of our economy.’

The Mercedes boss, who is also president of the European Automobile Manufacturers’ Association (ACEA), cautions that the continent’s car industry will “collapse” if the EU doesn’t drop the ban. Before regulators outlaw new ICE vehicles, Källenius predicts customers will rush to buy gas and diesel cars ahead of the deadline, set to take effect in nine and a half years, which “doesn’t help the climate at all.”

Electric vehicles are nowhere near the 100 percent market share the EU wants to impose. In the first half of the year, cars without a combustion engine accounted for just 17.5 percent of total sales in EU countries, the UK, and the European Free Trade Association (EFTA) nations, namely Iceland, Liechtenstein, Norway, and Switzerland. ACEA data also shows that plug-in hybrids represented only 8.7 percent of total deliveries. Traditional hybrids made up 35 percent, but that figure includes mild-hybrids, which many would argue are not “true” hybrids.

The EU’s 2035 ban is not set in stone, as it is scheduled for review in the coming months. However, as recently as March, the European Commission (EC), the EU’s executive arm, reaffirmed its commitment to 0 g/km CO₂ emissions for new cars sold from the middle of the next decade. At the time, the EC said it would “accelerate work on the preparation of the foreseen review of the CO₂ Standards Regulation for cars and vans,” signaling a possible earlier reassessment of the ban.

Mercedes has reason to be concerned about the potential impact on its business. EV sales accounted for only 8.4 percent of its global shipments in the first half of 2025, down from 9.7 percent in the same period of 2024. Even when including PHEVs, electrified models made up just 20.1 percent of total deliveries in the first six months of the year.

Whether common sense will prevail remains to be seen, but given the strong opposition the EU is facing, there is hope the ban could be eased to some extent. We wouldn’t be surprised if, at the very least, plug-in hybrids and maybe full hybrids continue beyond 2034.

Article courtesy of: https://www.motor1.com Published 12^th August 2025

Used car market enters second half in good health, retailer divide grows

The used car market has made a robust start to the second half of 2025, with key indicators such as consumer demand, speed of sale and transaction volumes remaining stable throughout June, according to the latest data from Auto Trader.

However, growing complexity in supply and demand is exposing a performance gap between independent and franchise retailers.

Despite ongoing global economic uncertainty, consumer confidence edged upwards in June. Auto Trader’s research revealed that nine out of ten car buyers remain confident in their ability to afford their next car, with two-thirds of over 1,100 consumers surveyed planning to buy within six months  and two in five within just two weeks.

This high buying intent was reflected in Auto Trader’s traffic figures, which hit 83 million cross-platform visits in June – a 3.2% year-on-year (YoY) increase and the platform’s highest ever June audience, following a record-breaking May.

That engagement is translating into sales, with used cars taking just 29 days on average to sell in June – a full day faster than last year and two days quicker than in May.

Retail transactions also saw year-on-year growth, rising 3.2%, according to Auto Trader’s retail sales data. However, a closer look reveals a widening gulf in performance between different types of retailers.

Independent retailers pull ahead

While independent retailers saw a robust 6.1% rise in sales last month, franchise retailers posted a marginal 0.1% year-on-year increase. The disparity is being driven by differing stock profiles and structural challenges affecting newer vehicles, particularly those aged 3-5 years – the core segment for many franchise operations.

The impact of the COVID-19 pandemic, which saw 3 million fewer new cars registered, continues to distort the used market. The number of 3-5-year-old vehicles in the UK parc has shrunk from 4.8 million in 2019 to just 3 million by the end of 2024 – a 37% drop – and is projected to fall further to 2.9 million by year-end, the lowest on record.

While franchise retailers reliant on this shrinking cohort face stock acquisition challenges, many independent retailers remain relatively unaffected. In fact, demand for older, more affordable cars is rising. Interest in 5-10-year-old vehicles grew by 3.4% YoY in June, while demand for cars over 10 years old jumped 8%.

Some franchise retailers have adapted by shifting their forecourt mix to include older stock or by focusing on brands like Volvo and Kia, which have retained or increased market share in recent years.

Retail prices hold steady despite pressure

Auto Trader’s Retail Price Index, based on 800,000 daily pricing observations, showed overall price stability across the market, with the average retail price of a used car standing at £16,780 in June – down just -0.1% YoY. This marks the third consecutive month of flat pricing after 19 months of decline, signalling broader market health.

However, younger cars continue to see pricing pressure. Vehicles under 12 months old dropped -3.4% YoY to an average of £32,664, and 1-3-year-old cars fell -1.4% to £25,112, partly due to heavy discounting in the new car market. In contrast, 5-10-year-old vehicles rose 1.2% YoY to £13,541, while cars over a decade old were up 4.1% to £6,561. Month-on-month, used car prices dipped by -0.6%, in line with seasonal trends.

Strategic Shift Needed

Commenting, Marc Palmer, head of strategy and insights, at Auto Trader, said: “As we enter the second half of the year, our data shows that the fundamentals of the used car market remain strong; consumer demand is robust, and cars are selling at pace, which combined with the overall softening in supply, means retail prices are stable, and continue to follow seasonal norms.

“At a granular level, there is considerable nuance in the market, however, which is impacting retailers’ traditional stock profiles and making the job of finding profitable cars more competitive. It’s why using insights over instincts to power your forecourt strategy is more important than ever.”

Article courtesy of: www.am-online.com published on 2nd July 2025