Mercedes CEO Källenius warns of cost increases due to EU protectionism
Image: Mercedes‑Benz (illustrative)
Mercedes-Benz CEO Ola Kallenius warns about the impacts of EU protection measures on the automotive industry. In a recent discussion during the Berlin Global Dialogue, he warned, according to Automotive News, that the European Union’s efforts to protect its domestic industry could raise costs and distort global supply chains.
Modern vehicles consist of thousands of components sourced worldwide to improve efficiency. Kallenius emphasized that while additional restrictions might enhance resilience, they would make production more expensive.
The Mercedes boss said Europe should not become an isolated actor that stops trading with key partners such as the US, China, Japan, South Korea, and India. The EU is currently working on regulations to boost production in Europe in order to level the playing field against Chinese imports. However, this could disadvantage trading partners like Japan and South Korea.
Automakers in Europe are receiving increasing political support. Reports suggest that a preliminary agreement has been reached between the EU and China to restrict the import of hybrid cars from China. Manufacturers in the People’s Republic are expanding overseas and have recently focused more on plug-in hybrids in Europe, partly in response to the EU’s tariffs imposed since late 2024 on electric cars built in China.
Kaellenius also called for more trade agreements and advocated for concluding an agreement with South America as well as continuing negotiations with India. He warned, however, that Europe must not be naive given the resurgence of protectionism. The Mercedes CEO is currently also the chairman of the European automobile association ACEA.
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Thomas Langenbucher is an expert in electromobility with professional experience in the automotive industry and finance sector. Since 2011, he has been covering electric vehicles, sustainable technologies, and mobility solutions for ecomento.de. Learn more.
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