Overview

• Chancellor Friedrich Merz convenes ministers, state leaders, unions and auto executives today to negotiate measures to shore up competitiveness and protect jobs.
• Merz has urged scrapping or delaying the EU’s 2035 end to new combustion-car sales, a stance opposed by SPD leaders as the European Commission reviews the rule.
• Finance Minister Lars Klingbeil moved to extend the electric-vehicle exemption from motor-vehicle tax, with reporting indicating a new horizon through 2035 to calm market uncertainty.
• Options under discussion include allowing hybrids beyond 2035, a green‑steel bonus affecting fleet CO2 calculations, higher car taxes for combustion models, social‑leasing for low‑income buyers and targeted industrial power relief.
• The crunch has sharpened, with VW pausing production for a week in Zwickau and Dresden due to weak EV demand, European car exports to China down 42% and to the US down 13.6% in H1 2025, and roughly 52,000 auto jobs lost year over year.