The idea is that some green ideologists think that when they don't need to drive a car because they don't leave their city, no one needs to drive a car. Because car driving creates CO2 which means car driving is bad. And they search for ways to implement that or make driving a car as bad as possible. Because they can't make the Deutsche Bahn better, they have to make driving your own car worse.
An EV is the superior vehicle in every aspect. Cheap fuel, reliable, nice to drive, less maintenance costs, less noisy and yes, no local emissions.
But then why not just make car driving not create CO2?
Because that doesn't play to Germany's industrial and economic strengths (precision machining, metallurgy, basically the whole ICE automobile supply chain).
EVs are just mechanically much simpler, with a shorter BOM that largely centers around Asian (particularly Chinese) battery, REE, and semiconductor supply chains, so hundreds of thousands of good jobs that supported Germany's industrial model are now economically obsolete.
That's the Kodak business model: New thing arrives that will disrupt the old thing, so don't build it. Problem is then someone else will build it anyway and instead of losing 2 jobs making ICE cars and getting 1.5 jobs making batteries and solar panels, you just lose the 2 jobs and get nothing, which is how Kodak went bankrupt.
Also, LFP batteries don't contain rare earths.