Germany's highest appeals court has dismissed a legal bid by environmental group Deutsche Umwelthilfe (DUH) to ban BMW and Mercedes-Benz from selling petrol and diesel vehicles by 2030. The ruling reinforces that government policy, not court orders, will determine how quickly the transition to electric vehicles happens. For Australian new car buyers, the implications are worth understanding.
What Happened
DUH, a German environmental organisation with a history of ambitious legal challenges, argued that BMW and Mercedes-Benz had exceeded their fair share of Germany's remaining carbon budget. The group calculated each company's allowance based on Germany's Climate Action Law, which targets a 65 per cent reduction in greenhouse gas emissions by 2030.
The Federal Court of Justice rejected the argument, ruling that carbon budgets derived from the Paris Agreement and German climate law apply to the country as a whole, not to individual companies or industry sectors. The court held that you cannot assign a specific carbon allocation to a single automaker and then sue them for exceeding it.
This was DUH's third attempt to force German automakers into accelerating their transition away from combustion vehicles. Previous cases against Mercedes-Benz in 2022 and against Germany's transport authority over US pickup trucks were also unsuccessful.
Both BMW and Mercedes-Benz welcomed the decision. BMW stated it provided legal certainty for companies operating in Germany, while both brands emphasised their ongoing commitment to electrification on their own timelines.
Why This Matters
This ruling matters for Australian buyers because it signals that the transition from combustion to electric vehicles will continue to be driven by market forces and government regulation rather than legal mandates against individual manufacturers.
In practical terms, that means petrol and diesel vehicles from European manufacturers will remain available for purchase in Australia for the foreseeable future. If you've been worried about being forced into an EV before you're ready, this ruling should ease those concerns.
It also means that European luxury brands like BMW and Mercedes-Benz will continue investing in their combustion and hybrid lineups alongside their EV programs. Buyers shopping in the luxury segment will have both options available, which creates healthy competition and better pricing across the board.
Australia's own New Vehicle Efficiency Standard (NVES), which sets emissions targets for manufacturers selling cars here, is the primary mechanism driving EV adoption locally. That standard encourages manufacturers to sell more low-emission vehicles without banning combustion cars outright.
Buying Strategy
The continued availability of combustion vehicles in Australia creates a dual opportunity for buyers. If you want a petrol or diesel car, the range of available models remains strong and dealers are motivated to sell them, particularly as manufacturers adjust their lineups to meet NVES targets.
If you want an EV, the pressure on manufacturers to meet emissions targets means competitive pricing and strong promotional offers on electric models. Brands that need to shift their sales mix toward lower emissions will discount EVs to achieve that balance.
In both cases, end-of-quarter timing remains your best friend. March, June, September and December consistently produce the strongest dealer flexibility on both combustion and electric models.
For European luxury brands specifically, the removal of import tariffs on European cars in Australia has improved baseline pricing. Combined with dealer incentives and the ongoing Luxury Car Tax (which still applies but with revised thresholds), there are genuine deals to be found.
How to Use This to Your Advantage
If you're shopping for a BMW or Mercedes-Benz, get competitive quotes through Carseekers before visiting the dealership. European luxury dealers have traditionally operated with less price transparency than mainstream brands, so arriving with data shifts the balance of power in your favour.
Ask about demonstrator vehicles and pre-registered stock. Luxury dealers often have demonstrators that have covered minimal kilometres and are available at significant discounts compared with factory orders.
If you're genuinely undecided between a combustion model and an EV from the same brand, tell the dealer. Brands trying to boost their EV sales mix may offer more attractive pricing on the electric version to steer you in that direction. That works to your benefit regardless of which way you ultimately decide.
The Wrap Up
The German court ruling confirms what most industry observers already expected: the shift to electric vehicles will happen gradually, driven by policy and consumer demand rather than legal bans. For Australian new car buyers, that means continued choice between combustion, hybrid and electric powertrains, with competitive pricing across all three. Use that competition to negotiate the best deal, and let Carseekers help you compare your options.
Considering finance for your next car? Loanseekers can help you explore car loan options.
The finer details
Your questions answered.
Will petrol and diesel cars be banned in Australia?
No ban on petrol and diesel car sales has been proposed or legislated in Australia. The government's New Vehicle Efficiency Standard incentivises electrification through credits and penalties but does not mandate a sales end date. Petrol and diesel cars will remain legal to buy and sell in Australia for the foreseeable future.
What was the German court case about banning petrol cars?
Environmental group Deutsche Umwelthilfe attempted to force BMW and Mercedes-Benz to stop selling petrol and diesel vehicles through the courts. Germany's highest appeals court rejected this bid, confirming that banning specific vehicle types requires government legislation, not court orders. The ruling reinforces that policy rather than litigation drives the EV transition.
Does the German court ruling affect Australia's EV policy?
Not directly. Australia's automotive policy is independent of German court decisions. The ruling's relevance for Australian buyers is as a signal that petrol and diesel vehicles face regulatory pressure through efficiency standards rather than outright bans, and that the transition timeline is measured in decades rather than years.
Should I still buy a petrol or diesel car in Australia in 2026?
Yes, if it meets your needs. Petrol and diesel vehicles will remain registerable, serviceable, and resaleable in Australia well past the decade. The running cost advantage of EVs is real and growing, but petrol and diesel remain the practical choice for high-kilometre regional drivers, heavy towers, and buyers without home charging access.
Will petrol cars lose resale value faster in Australia as EV adoption grows?
Gradually yes, but not dramatically in the short term. The Australian used car market still has a large petrol-dominant buyer pool. Diesel utes in particular retain strong resale values due to genuine capability advantages. The clearest softening is in non-hybrid petrol passenger cars in the $20,000 to $40,000 used market segment.
Are European countries banning petrol cars, and does that affect Australia?
The EU has passed legislation to effectively phase out new petrol and diesel car sales by 2035, with exceptions being discussed for synthetic fuel vehicles. This affects car development globally and accelerates the shift of European brands toward electrification. The models arriving in Australia from 2028 onward will increasingly reflect European electrification mandates.
