The anticipated reversal of the planned combustion engine phase-out in 2035 is triggering a wave of criticism from leading economists, raising serious questions about its long-term economic and industrial implications for Germany and the European Union.
Monika Schnitzer, Chair of the German Council of Economic Experts, expressed deep skepticism in an interview with Süddeutsche Zeitung, arguing that the policy shift will fail to solve the current challenges facing automakers and offers no guarantee of safeguarding jobs within the German automotive sector. “Will this actually save jobs by postponing the combustion engine phase-out? I fear the opposite.
Brussels is expected to formally unveil revised plans this week, which will likely permit the continued registration of vehicles powered by gasoline and diesel engines beyond the originally scheduled 2035 deadline. While the German government has reportedly lobbied for this change, Schnitzer voiced concerns that the resulting policy uncertainty is sending contradictory signals to industries that have already made substantial investments in electric vehicle technologies. She cautioned against a perceived advantage for German manufacturers, warning, “Short term perhaps, but even today, no one uses a keypad phone.
Economists Thomas Puls from the IW (Institut der deutschen Wirtschaft), Sebastian Dullien from the IMK (Hans-Böckler Stiftung) and Anita Wölfl from the Ifo Institute echoed Schnitzer’s reservations. Puls characterized the debate as largely symbolic, suggesting that electric vehicles and plug-in hybrids will remain the superior choice for most applications by 2035 regardless.
The underlying issue, according to Dullien, isn’t the combustion engine phase-out itself, but a technological deficit among German manufacturers, particularly in the critical area of battery cell production. This raises a fundamental question about the motivations of automotive executives: “Are they aiming for short-term profit maximization or working in the long-term interest of the industry and its workforce?
Anita Wölfl from the Ifo Institute intensified this criticism, pointing to the unsustainability of a dual-strategy approach – simultaneously pursuing electric and combustion engine vehicles – which has been adopted for too long by major automotive groups. She highlighted that manufacturers are increasingly diverting investment away from traditional gasoline and diesel technologies altogether, creating a looming question about the future supply of new combustion engine models. “Where are these new models supposed to come from in the coming years?” she asked.
The policy reversal, therefore, risks undermining the credibility of Germany’s climate commitments while potentially exacerbating the longer-term technological disadvantage faced by its automotive industry.
