German Auto States Demand EU Tariff Expansion on Chinese Hybrids and 2035 Engine Ban Revision

Cross-party alliance warns of irreversible industry damage

The leaders of Germany's three largest automotive states have sent a joint position paper to the European Union and the German federal government, demanding coordinated support for car manufacturers and component suppliers. Markus Söder of Bavaria (CSU), Cem Özdemir of Baden-Württemberg (Greens), and Olaf Lies of Lower Saxony (SPD) describe the sector as the economic foundation of Germany and Europe. The document states that 52,000 jobs were lost across the German automotive industry in 2025 alone. Söder noted that the sector generates €180 billion in annual revenue in Bavaria. The three premiers warned that without competitive domestic market conditions, effective protection tools, and fair trade under World Trade Organization rules, the sector risks long-term damage.

Trade defense and European battery alliances

The position paper urges the European Commission to extend anti-subsidy investigations and countervailing tariffs on Chinese vehicles to include plug-in hybrid models, which are entering European markets without the duties applied to battery-electric cars. The premiers also advocate moderate local-content requirements under a Made with Europe approach, covering members of the European Economic Area and free trade partners. Following a meeting with the Volkswagen works council in Wolfsburg, Federal Finance Minister Lars Klingbeil suggested that Chinese manufacturers could be required to establish joint ventures with European partners to sell vehicles in the EU. To reduce reliance on Asian battery supply chains, the premiers called for cross-border cooperation modeled on the aerospace consortium Airbus, arguing that the EU Battery Booster program is insufficient on its own.

Overall, we must focus much more on innovation and high-tech, because that is where future prosperity and jobs lie.

Proposed revisions to EU emissions and combustion engine targets

The state leaders called on Brussels to revise its climate regulatory framework for transport, specifically proposing an exit from the planned 2035 European phase-out of internal combustion engine vehicles. They requested that the EU CO2 fleet reduction target be lowered to 90% without collateral conditions, alongside an earlier timeline for the commercial truck CO2 review. Under their proposal, vehicles running entirely on renewable fuels would qualify as zero-emission vehicles, while the use of green steel and synthetic fuels would count toward manufacturer compliance targets. Söder called for technology openness and an end to rigid bans, stating that high-tech combustion engines still retain a role alongside electrification.

Energy costs and domestic market measures

Domestically, the three premiers urged the German federal government to lower industrial electricity prices, reduce grid fees, and cut electricity taxes to stabilize operating costs. Lies emphasized that reducing vehicle charging costs through tax relief is necessary to sustain electric vehicle adoption across consumer segments. The joint paper also proposes expanding state purchase subsidies to include used electric vehicles, developing autonomous driving regulatory frameworks, and easing European state aid rules to permit technological investment in established automotive hubs.

The charging price must be reduced to a minimum through a low electricity tax.