Germany Officially Challenges EU’s 2035 ICE Ban: Merz Sends Letter to Brussels

Germany just made it official. Chancellor Friedrich Merz confirmed today that he’s sending a letter to European Commission President Ursula von der Leyen demanding that Brussels allow plug-in hybrids and “highly efficient” combustion engines to be sold beyond the 2035 deadline.

“We’re sending the right signal to the commission with this letter,” Merz said at a press conference in Berlin. The German government wants to protect the climate “in a technology-neutral way.”

This isn’t a suggestion. It’s Europe’s largest auto market formally breaking with the EU’s flagship emissions policy.

What Germany Is Asking For

The letter requests that the EU permit three vehicle types beyond 2035: battery-electric vehicles (already allowed), plug-in hybrids, and combustion vehicles running on synthetic e-fuels.

“Our shared goal should be a regulation that is innovation-friendly and open to all technologies, harmonizing climate protection with industrial competitiveness,” Merz stated after the coalition meeting.

The timing is strategic. The European Commission is set to announce an auto sector package on December 10 that could reshape the 2035 rules. On Wednesday, EU Vice-President Stephane Sejourne already signaled Brussels is willing to show “flexibility” in how the phase-out is achieved.

The Coalition Unified – Eventually

The real story is that Germany’s coalition actually agreed on this. Merz’s center-right CDU has long opposed the ban, but he needed buy-in from the center-left Social Democrats (SPD) who initially wanted to stick with the 2035 deadline.

SPD Vice Chancellor Lars Klingbeil explained the shift: “The future viability of the German automotive industry, securing jobs, that is the key argument for us. We agree that the future of the industry is electric… but we need to be open to more technologies, we need flexibility.”

Bavaria’s Minister President Markus Soeder added that Germany will also introduce a new EV subsidy of up to €5,000 ($5,780) for electric or hybrid vehicles with components largely made in Germany.

The Real Numbers Behind the Move

Germany’s automotive sector has shed nearly 50,000 jobs in the past 12 months alone. BMW CEO Oliver Zipse previously warned that the 2035 ban “could also threaten the European automotive industry in its heart.”

Environmental groups aren’t buying the argument. Transport & Environment’s Sebastian Bock responded: “Anyone who thinks that Germany will be able to secure jobs and value creation in the future with combustion-engine technology, which is already outdated today, is deliberately closing their eyes to reality.”

EVXL’s Take

We called this two days ago. When we reported on European automakers lobbying for a 2035 reprieve, we noted that they’re “treating the symptom rather than the disease.”

Germany’s letter confirms that diagnosis. The German auto industry isn’t struggling because of regulations – it’s struggling because it fell behind. Volkswagen posted a €1.3 billion loss last quarter as Porsche’s EV strategy collapsed. VW’s Cariad software division burned through €12 billion before admitting it couldn’t compete with Chinese development speeds.

Here’s the contradiction: Germany is simultaneously asking to weaken EV mandates while launching a €5,000 EV subsidy. That’s not a coherent industrial strategy – that’s damage control.

The uncomfortable truth remains the same. While European executives petition Brussels for regulatory relief, BYD is doubling its European dealer network to 2,000 locations by 2026 and building tariff-proof factories in Hungary and Turkey. Chinese automakers develop new vehicles in 18 months versus VW’s five years.

Softening the 2035 target won’t fix that development speed gap. It just gives German automakers permission to retreat to profitable hybrids while Chinese brands capture market share.

The December 10 announcement will tell us whether Brussels blinks. But even if the EU grants flexibility, it won’t solve the fundamental problem: German automakers need to build better EVs faster, not buy more time to avoid building them at all.

What do you think? Share your thoughts in the comments below.