Germany Rejects Proposal to Review 2035 Ban on Internal Combustion Engine Cars
Germany has declined a request from the Italian government to advance the review of the ban on the sale of new internal combustion engine cars by 2035. Last year, the European Union (EU) approved a groundbreaking law that prohibits the sale of new gas and diesel cars from 2035 and mandates zero CO2 emissions for all new vehicles. The EU Commission had scheduled a review of this legislation for 2026, specifically to assess hybrid cars and determine if they should be exempted from the ban. However, Italy sought an earlier review date.
German Environment Minister Steffi Lemke stated that Germany will not entertain discussions about potentially diluting European CO2 emission performance standards, adding that the German government does not support Italy’s proposal. Auto manufacturers are facing more stringent CO2 targets in 2025 as Europe reduces its cap on average emissions from new vehicle sales from 116g/km in 2024 to 94 grams/km.
Exceeding these limits can result in fines of €95 per excess g/km of CO2 multiplied by the number of vehicles sold, potentially leading to penalties amounting to hundreds of millions of euros for auto manufacturers. These looming penalties coincide with a significant decline in demand for electric vehicles (EVs) across Europe. According to data from the European Automobile Manufacturers’ Association (ACEA), new car sales in the European Union dropped by 18.3% in August—the lowest level seen in three years.
The ACEA has urged the commission to bring forward review targets as carmakers face challenges due to inadequate conditions necessary for boosting EV sales such as charging infrastructure, affordable energy, tax incentives, and raw material supply.
In addition, discussions are underway regarding whether tariffs should be imposed on imports of EVs from China—a vote is scheduled for Friday. Germany’s Economy Minister Robert Habeck hopes that a political solution can be reached regarding this matter. France, Italy, Poland, and Greece are reportedly considering voting in favor of imposing tariffs up to 45% on Chinese-made electric vehicles due to allegations that China subsidizes their production resulting in artificially low prices.
The European Commission is currently investigating these allegations and has proposed various tariffs which will be voted upon by all member states on October 4th. Proposed tariffs range between 7.8% for Tesla cars up to 35.3% for Chinese brand SAIC and other companies accused of non-cooperation with EU investigations—these additional tariffs would be applied alongside existing import duties set at a standard rate of10%.
Under EU regulations, if no qualified majority opposes it (15 member states representing at least65%ofthe bloc’s population),the commission can impose definitive tariffs lasting five years.The commission has expressed willingness towards alternatives such as price undertakings involving minimum import prices or volume caps; however,this suggestion was already rejected by Chinese automakers.
