German coalition government at odds over rejection of EU’s 2035 combustion engine ban

The German coalition government has not yet agreed on a position regarding the EU’s 2035 ban on the sale of new combustion engine vehicles, environment minister Carsten Schneider from the Social Democratic Party (SPD) said. Newspaper Tagesspiegel reported that Schneider denied his party’s consent to chancellor Friedrich Merz of the conservative CDU, who declared his intention to topple the ban.

“I expect that we will consistently adhere to the regulatory framework,” Schneider said, arguing that the EU ban makes sense even if the European car industry faces a range of challenges, including US tariffs and “dumping prices” from Chinese manufacturers. Companies that have made large investments in electric vehicles “must be able to rely on this,” Schneider argued, adding that a decision would follow soon. “We should have the courage to see that tomorrow will be different from yesterday,” the minister said, referring to future mobility technologies.

Merz said last week he was in favour of scrapping the ban. “It is generally wrong when the state makes technological prescriptions for a certain point in time,” Merz said.

In a guest article for business daily Handelsblatt, economist Monika Schnitzer from the government’s council of economic advisors said slowing down EV adoption was a risky gamble for Germany. “Electric mobility is no longer just a promise, it is the present,” Schnitzer said, arguing that “Germany is sending the wrong political signals” on this. “Instead of making the transformation manageable, there’s a dispute about watering down the 2035 EU exit from combustion engines and limiting sanctions for missing vehicle fleet targets. This flip-flopping is creating uncertainty,” she said.

Uncertainty did not mean that customers would buy combustion cars, but that they would delay purchases altogether until policy was clearer, Schnitzer argued. “This is fatal for industry.” Carmakers and suppliers had invested billions of euros in new production lines for electric cars, but talking about e-fuels and combustion engines now would “put the trust in major decisions at risk,” she wrote. The best way forward is to ensure that driving EVs becomes more affordable than combustion engines by improving the charging network and better regulating charging tariffs, according to Schnitzer.