Policy Brief: Combustion engine phase-out by 2035 will strengthen the German car industry

Policy Brief: Combustion engine phase-out by 2035 will strengthen the German car industry

Press release of 24 February 2025

The planned phase-out of petrol and diesel cars from 2035 is causing controversy in Germany. A new policy brief by research institutes in Germany, England, Canada and Switzerland suggests that the EU’s phase-out policy could strengthen - not weaken - Germany's automotive sector. The briefing provides valuable impetus for the political debate in the run-up to the federal elections and for the future German government. IDOS researcher Dr Nicholas Goedeking contributed to the policy brief, which highlights concrete strategic advantages for the German automotive industry.

In the debate surrounding the EU’s phase-out of combustion engines, a new scientific policy brief supports the position of those in favour. The paper, which was written by researchers from six research institutions, recommends that politicians stick to the existing plans. The analysis, in which the German Institute of Development and Sustainability (IDOS) is also involved, argues that supporting the transition to e-mobility is in the long-term interests of the German and European automotive industry.

While the technological shift in the automotive industry undoubtedly represents a major upheaval, it is also unavoidable. A delay would only harm German manufacturers - and instead increase the lead of competitors from China and other EV leaders.

Sticking with the phase-out plans

“The best thing policymakers can do is to provide investment certainty by maintaining Europe’s ambitious timeframe for the switch to EVs,” says Professor Karoline Rogge, who coordinated the project from the University of Sussex (United Kingdom). “Changing gears now will only harm the industry’s international competitiveness.”

The policy brief also argues that phasing out combustion engines should be accompanied by support for suppliers and affected workers. Prof. Adrian Rinscheid from the University of St.Gallen (Switzerland) says: “This could include workforce reskilling and job transition programmes, R&D and innovation grants to help internal combustion engine (ICE) suppliers shift towards EV-related components and support diversification.”

Implementing complementary transition measures

Rinscheid also emphasizes that “just transition measures” are crucial for securing public acceptance of the shift away from ICEs: “Providing a clear economic path for workers and businesses will help bring people on board and strengthen Europe’s automotive industry in the long term.”

Rather than weakening phase-out targets, as has been widely discussed, policymakers should support the transformation of Germany’s automotive industry with complementary policies. “Phase-out policies alone won’t secure Europe’s leadership in the global net-zero innovation race,” says Dr Nicholas Goedeking, based at IDOS in Bonn. “A comprehensive policy approach is essential to maintain Europe’s competitive edge.”

Since calls for a weakening of the European phase-out policy have become louder, the authors hope that their findings will contribute to a more informed debate on the future of the German and European automotive industry.

This policy brief “How phase-out policies strengthen Europe's automotive industry” is an EMPOCI project and is funded by the European Research Council. The project is led by Professor Karoline Rogge, University of Sussex and involved Dr. Nicholas Goedeking, IDOS.

 

The participating academic include:

• Prof Dr Karoline S. Rogge, University of Sussex and Fraunhofer ISI
• Dr Nicholas Goedeking, German Institute of Development and Sustainability (IDOS)
• Prof Dr Jörn Hoppmann, University of Oldenburg
• Dr Hauke Lütkehaus, University of Oldenburg
• Prof Dr Adrian Rinscheid, University of St. Gallen
• Prof Dr Daniel Rosenbloom, Carleton University
• Dr Aline Scherrer, Fraunhofer ISI
• Dr Qi Song, University of Sussex