The German Chancellor, Friedrich Merz, declared yesterday that he wants the EU Commission to abolish the EU ban on the sale of ICE cars after 2035. “I don’t wish Germany to be one of the countries supporting this bad interdiction,” he said on the TV channel NTV.
The pressure of big German car companies like BMW, Mercedes, and Volkswagen has, of course, reached and influenced Merz, who is now transferring the pressure to his (CDU) party colleague, Ursula von der Leyen, President of the EU Commission.
Re-examining
Last month, the EU Commission announced that it wants to re-examine “as soon as possible” this ban. Normally, a re-examination of the decision is due in 2026, but the car industry is lobbying heavily for an accelerated timeline on the matter.
Meanwhile, in Germany, the subject is also a point of discussion with Merz’s coalition partner in the German government, the Social Democrats (SPD). The German Minister of the Environment, Carsten Schneider (SPD), is not yet convinced that abandoning the ban would be a good idea, says Merz, and he hopes to persuade him before Thursday when they meet the German car industry representatives.
The German car industry has been severely impacted in recent years, with the energy transition being a key factor. Most of them reacted too slowly and are now confronted with a market that isn’t transitioning as quickly as expected.
Merz himself has pointed out that diesel engines, for example, remain necessary for (truck) transport purposes and that it would be “a cruel error” for Germany if it had to stop researching in this field.
The German Chancellor has also put high hopes in synthetic fuels, making ICE engines compatible with environmental respect. “We don’t want to block some technologies, we want them to flourish,” he said as a conclusion.
Electric sales in Germany
In September, sales of BEVs were up 32% compared to the same month last year and represented almost one-fifth of total sales. However, analysts persist that the car market is stagnating, like almost everywhere in Europe, and that the September increase doesn’t announce a trend reversal.
According to estimates, new car sales for the year as a whole will be roughly on a par with the previous year, and also some 20% below the 2019 pre-pandemic figure.
That’s why the German government, or at least the SPD fraction of it, wants to extend the vehicle tax exemption for electric cars, which was recently reinstated, until 2035. Federal Finance Minister Lars Klingbeil (SPD) has announced a corresponding draft law, but the project has been in limbo most recently.
According to the current version of the Motor Vehicle Tax Act, the exemption for newly registered pure electric cars will no longer apply as of 1 January 2026, so some urgency is required. With the new version announced by Klingbeil, the regulation will apply to vehicles registered for the first time by 31 December 2030.
Tax exemption extended?
The extension of the motor vehicle tax exemption for electric cars is one of the points that the federally governing political parties CDU, CSU, and SPD had already agreed upon in their coalition agreement as a measure to strengthen the automotive industry.
The announcement that the measure is now to be implemented coincides with the upcoming car summit at the Chancellery. According to Klingbeil, these and other measures are to be discussed on Thursday at the ‘automotive dialogue’.
As already said, Chancellor Friedrich Merz (CDU) has invited representatives from several federal ministries, the federal states, the automotive industry, and trade unions to the meeting. Global issues, such as sales trends in China and the tariff conflict with the U.S., will also be discussed, as well as national measures.
“We must now put together a strong package to lead the German automotive industry into the future and secure jobs. We want the best cars to continue to be built in Germany,” said Klingbeil. “Everyone knows that the future is electric,” he also accentuated.
According to the news agency DPA, the car summit could also discuss the ‘program for low and middle-income households’ agreed by the CDU/CSU and SPD in their coalition agreement. The ‘social leasing program for cars’ in France is seen as a model for this. However, since its announcement in the coalition agreement, there has been very little news about this project.
