Published by Global Banking and Finance Review
Posted on October 9, 2025
By Andreas Rinke and Christian Kraemer
BERLIN (Reuters) -Chancellor Friedrich Merz vowed to do everything possible to ensure there is no hard cut-off for carbon dioxide-emitting cars from 2035 in the European Union after meeting with executives from top German automakers on Thursday.
"If I have my way, and I will do everything I can to achieve this, there will be no such hard cut in 2035," Merz told a press conference following the meeting.
The path to electric mobility would continue and would likely be the central technology of the next few years, Merz said, but he emphasised that the industry needed time to discover paths forward with alternative energy sources.
Hildegard Mueller, head of Germany's VDA auto association, supported the government's efforts to incorporate the sector's suggestions on how to reduce emissions and stay competitive.
"The technical options are helping now, helping to secure jobs today," said Mueller.
Merz also announced an additional 3 billion euros ($3.5 billion) in subsidies to support electric vehicle purchases by middle- and lower-income households earlier on Thursday.
CAR INDUSTRY WANTS MORE TECHNOLOGY OPTIONS
The EU has set a target for a 100% reduction of CO2 emissions from new cars and vans by 2035, with intermediate 2030 targets, which has been taken to mean the end of the internal combustion engine for new vehicles.
But European automakers, facing stiff competition from China and U.S. tariffs, argue the timeline is unrealistic.
They are urging Brussels to extend compliance deadlines and broaden the definition of acceptable technologies.
Finance Minister Lars Klingbeil, whose Social Democrats have been divided on the issue, said the party could get behind having range extenders, plug-in hybrids and the blending of new fuels be allowed past 2035.
"For us this is also a path that we consider to be absolutely feasible," he told the press conference.
VW boss Oliver Blume told Germany's dpa news agency he agreed that electric mobility was the technology of the future, but that from today's perspective, the 2035 deadline for combustion engines was unrealistic.
Mercedes-Benz CEO Ola Kaellenius also said a certain proportion of highly efficient, electrified combustion engines should be permitted beyond 2035.
"We still need a few side roads," he told business publication manager magazin in an interview published on Thursday ahead of the meeting.
($1 = 0.8612 euros)
(Reporting by Andreas Rinke and Christian Kraemer, Additional reporting by Thomas Escritt, Writing by Miranda Murray and Bernadette Hogg, Editing by Mark Potter and Ed Osmond)
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