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Battery EV sales seen exceeding 30% of EU car market by

2027

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T&E says Mercedes focuses on more profitable combustion

engine

models

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To continue lagging on emission targets

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Report warns against weakening future emission targets

BRUSSELS, Sept 8 (Reuters) - All European carmakers

except Mercedes-Benz are on track to meet the European

Union's 2025-2027 carbon emission targets thanks to an expected

surge in sales of new electric vehicles, according to a report

published on Monday.

Research and campaign group Transport & Environment forecast

a marked improvement from first-half sales in 2025, when only

Geely-owned Volvo Cars and BMW were on course while

Stellantis ( STLA ), Renault, Volkswagen

and Mercedes were lagging.

The report said increased launches of more affordable models

thanks to declining battery prices and sharp growth of charging

infrastructure were fuelling demand. It forecast battery

electric vehicle sales would surpass a 30% share of the EU car

market in 2027 from 18% this year.

T&E said this was a sign that targets were working and said

that any weakening of the next set of targets for 2030 and 2035

would dismantle investments in EVs and allow China to extend its

lead.

"Europe now faces a decisive choice: to either lead the

global BEV race and confidently enter the electric age or risk

falling behind in the fossil fuel era," it said.

Auto groups have said that future CO2 emission targets,

including a 100% reduction by 2035, are no longer feasible.

Executives are due to meet European Commission President Ursula

von der Leyen on September 12 to discuss the EU sector's future.

The European Commission yielded in March to pressure from

European automakers to give them three years, rather than one,

to meet CO2 emission targets for new cars and vans.

T&E said expected Mercedes to keep trailing other EU

automakers on the targets as it was focussing on more profitable

internal combustion engine models.

Failure to meet the targets results in fines, which

carmakers had said would run into billions of euros if 2025 was

the target year. Compliance is now based on average emissions

over the period 2025 to 2027.

Mercedes is expected to avoid fines by pooling its emissions

with those of Volvo Cars and Polestar, for which

Mercedes would pay its rivals. Sweden's Volvo is majority-owned

by China's Geely Holding, whose chairman controls a

company with a 9.69% stake in Mercedes.

(Reporting by Philip Blenkinsop; Editing by Emelia

Sithole-Matarise)