German Chancellor Reaffirms Opposition to EU Ban on Combustion Engines

Following a high-level automotive summit at the Chancellery, German Chancellor Friedrich Merz has reiterated his administration's stance against the proposed European Union prohibition of new combustion engine vehicles. Merz stated that he intends to actively seek the reversal of the EU regulation, which is scheduled to take effect in 2035 and would mandate that all newly registered vehicles be emissions-free.

The summit brought together key figures from automobile manufacturers, suppliers, industry associations, trade unions, and representatives from federal states with significant automotive sectors. During the discussions, there was acknowledgment of the growing importance of electric mobility as the likely future standard for transportation. The Chancellor emphasized that German industry and its infrastructure must adapt to this technological shift.

However, Merz also underlined the necessity of supporting the country's automotive industry through this period of transformation by maintaining flexibility for technological innovation. According to his assessment, electric vehicles are expected to account for only about half of Germany's passenger car market by 2035, making it crucial for manufacturers to have alternative options beyond electric propulsion.

The current EU directive aims to drastically reduce vehicle emissions by allowing only the registration of zero-emission vehicles from 2035 onwards. The European Commission is scheduled to review the policy later this year to assess whether the ban will remain in place. Meanwhile, environmental groups staged protests outside the Chancellery, voicing concerns over Germany's automotive policy and advocating for more ambitious climate action.

Germany's automotive sector is currently experiencing significant challenges. With approximately 770,000 employees and an annual turnover of 540 billion euros, the industry is highly export-oriented. However, it faces a decline in vehicle sales, rising competition from manufacturers in China, and ongoing difficulties in transitioning to electric vehicle production. These challenges are compounded by EU climate regulations aimed at reducing CO2 emissions, as well as tariffs on exports to the United States. As a result, many companies in the sector have reported declining profits, implemented cost-cutting measures, and announced job reductions.

The German government's approach aims to bolster the competitiveness of domestic automotive firms while navigating evolving European climate policies and global market pressures. The outcome of the EU Commission's policy review later this year will play a critical role in determining the regulatory framework for the industry's future.