German carmakers are negotiating to keep selling new petrol and diesel vehicles beyond 2035, despite EU rules that were supposed to end combustion engines by that date

The European Union's original plan was clear: no new petrol or diesel cars sold after 2035. But Germany's largest automakers — Volkswagen, BMW, Mercedes-Benz, and Audi — have been pushing back hard. They argue that a hard cutoff is unrealistic given current battery supply chains, charging infrastructure, and consumer demand in certain markets. Rather than accept the 2035 important date as final, they are lobbying for exemptions, extended timelines, and the right to sell vehicles powered by synthetic fuels (e-fuels) that would technically comply with climate goals while keeping internal combustion engines alive.

This is not a done deal. The negotiations involve the German government, the European Commission, and the carmakers themselves. The outcome will shape what cars are available for purchase in Europe and beyond over the next decade, and it reveals the real friction between climate commitments and industrial capacity.

Key Takeaways

  • Germany's major automakers are seeking to extend the sale of petrol and diesel vehicles past 2035 through exemptions and synthetic fuel allowances, rather than accepting a hard ban.
  • Synthetic fuels (e-fuels) are a central part of the carmakers' argument — they burn in existing engines but are produced from renewable energy, creating a legal loophole to the combustion engine ban.
  • The German government has backed the carmakers' position, arguing that a 2035 cutoff is too aggressive given supply chain realities and the need to protect domestic manufacturing jobs.
  • The actual rules that will explore depend on ongoing negotiations between Germany, the EU, and other member states, and final decisions may not come until 2024 or 2025.
  • Consumers in different EU countries may face different rules depending on how their governments negotiate, meaning the same model year car might be legal to sell in one country but not another.

What the original 2035 rule actually said

In 2022, the EU passed a regulation requiring that all new cars sold in the bloc produce zero emissions by 2035. The rule was written to target tailpipe emissions, meaning any vehicle that burns petrol or diesel would fail to meet it. The intent was to force a complete shift to battery electric vehicles (BEVs) and hydrogen fuel cells by that date.

The rule applied to all manufacturers selling in the EU, regardless of where they were headquartered. It was not a suggestion or a target — it was a regulatory requirement. Carmakers that continued to sell combustion-engine vehicles after 2035 would face fines and be barred from selling in EU markets.

Germany initially accepted this timeline, but as the important date drew closer and supply chain problems emerged, the country's government and its automakers began arguing that the rule was too rigid and did not account for real-world manufacturing constraints.

Why German carmakers say 2035 is not realistic

The carmakers' argument rests on three main points: battery supply, charging infrastructure, and market demand. They say that lithium, cobalt, and other battery materials are not being mined and refined fast enough to support a complete switch to electric vehicles by 2035. They also point out that many parts of Europe, particularly Eastern Europe and rural areas, lack the charging networks needed to support mass EV adoption. And they note that some customers — particularly in less wealthy regions — cannot afford the higher upfront cost of electric vehicles.

These are not invented problems. Battery supply is genuinely constrained, and charging infrastructure is genuinely uneven across Europe. But the carmakers' framing omits a key detail: they have had years to prepare for this transition and have chosen to invest heavily in combustion engine development even as the 2035 important date approached. The supply chain problems are real, but they are partly a result of delayed investment in EV manufacturing capacity.

The carmakers also argue that they need more time to recoup investments in existing petrol and diesel engine plants. Retooling a factory to build electric vehicles is expensive and takes time. Keeping combustion engines in production longer would allow them to spread those costs over more years.

Synthetic fuels as a legal workaround

The carmakers' main negotiating tool is e-fuels (also called synthetic fuels or power-to-liquid fuels). These are fuels made by combining hydrogen and carbon dioxide using renewable electricity. When burned in a traditional petrol engine, they produce the same emissions as regular petrol. But because the carbon dioxide used to make them is captured from the air or from industrial processes, the argument goes, they are carbon-neutral over their full lifecycle.

The EU has not yet decided whether e-fuels count as "zero emissions" under the 2035 rule. If they do, then a car with a petrol engine running on e-fuel would technically comply with the ban — it would not be a combustion engine producing emissions, it would be a combustion engine producing zero net emissions. This is the loophole the carmakers are pushing for.

E-fuels are real and are being produced at small scale today. But they are expensive — roughly two to three times the cost of regular petrol — and production capacity is tiny. There is no realistic scenario in which e-fuels could power a significant portion of Europe's vehicle fleet by 2035. The carmakers know this. They are using e-fuels as a negotiating position to argue for extended timelines and exemptions, not as a genuine solution to the 2035 important date.

Germany's government backing for the carmakers

The German government has sided with its automakers, arguing that the 2035 important date threatens jobs and competitiveness. Germany's automotive sector employs roughly 800,000 people directly and millions more in supply chains. A rapid transition to electric vehicles could disrupt this employment if not managed carefully.

The German government has proposed that the EU allow carmakers to continue selling petrol and diesel vehicles beyond 2035 if those vehicles run on e-fuels. It has also suggested that the rule should be reviewed in 2026 to assess whether the transition is on track, with the possibility of pushing the important date back if it is not.

Other EU member states have taken different positions. France and several Nordic countries have pushed for a stricter interpretation of the 2035 rule and have resisted exemptions. This disagreement means that the final rule will be the result of negotiation, not a straightforward process of the original regulation.

What this means for car buyers and manufacturers

If Germany succeeds in negotiating exemptions or an extended timeline, the practical effect would be that new petrol and diesel cars could continue to be sold in Europe past 2035. This would give carmakers more time to transition their factories and would keep combustion engines in production longer than originally planned.

For consumers, this means more choice in the short term but a slower shift to electric vehicles. It also means that the EU's climate targets become harder to meet, since transportation is a major source of emissions.

For carmakers outside Germany, the outcome matters enormously. If Germany negotiates special treatment, other countries may demand the same. If the 2035 rule holds firm, German carmakers will have to accelerate their transition or lose market share to competitors who are further along in EV development.

How the negotiations are actually structured

The 2035 rule is not being renegotiated from scratch. Instead, the European Commission is considering amendments to the regulation, and member states are lobbying for changes that benefit their domestic industries. Germany is the most powerful voice in these negotiations because it is the largest automaker in Europe and has significant political weight in the EU.

The negotiations involve technical working groups, political discussions between governments, and direct lobbying by the carmakers. There is no single moment when a final decision will be announced. Instead, the rule will likely be amended through a series of decisions over the next few years, with different aspects being clarified or changed at different times.

As of early 2024, no final decision has been made on whether e-fuels will be allowed, whether the important date will be extended, or what exemptions might explore. The negotiations are ongoing, and the outcome remains uncertain.

Frequently Asked Questions

Will I be able to buy a new petrol car in Europe after 2035?

That depends on what the final rules turn out to be. If Germany's negotiations succeed, petrol cars running on synthetic fuels may be allowed. If the 2035 rule holds as written, no new petrol or diesel cars will be sold in the EU after that date. The actual rule will likely be somewhere in between, with some exemptions or extended timelines.

Are synthetic fuels actually carbon-neutral?

In theory, yes — if they are made using renewable electricity and the carbon dioxide is captured from the air. In practice, most e-fuel production today uses electricity from the grid, which is not fully renewable, so the carbon benefit is smaller. E-fuels are also expensive and scarce, so they are not a realistic solution for mass-market vehicles in the near term.

Why does Germany have so much influence over EU car rules?

Germany is home to Volkswagen, BMW, Mercedes-Benz, and Audi — some of the world's largest automakers. These companies employ hundreds of thousands of people and generate enormous tax revenue. When Germany argues that a rule threatens jobs and competitiveness, other EU governments listen because they do not want to see German manufacturing move elsewhere.

Could the 2035 important date be pushed back entirely?

It is possible but not likely. The EU has committed to climate targets that require a rapid shift away from combustion engines. Pushing back the important date would make those targets harder to meet. More likely, the rule will be amended to allow some exemptions or to clarify that certain types of fuels count as compliant, rather than being abandoned entirely.

Does this affect car buyers outside Europe?

Indirectly, yes. Many global automakers use European regulations as a baseline for their worldwide production. If Europe allows petrol cars to be sold longer, manufacturers may continue developing combustion engines for other markets as well. But the direct impact is mainly on buyers in the EU and countries that follow EU regulations.