Chancellor Angela Merkel's government wants to double the proportion of biofuel in petrol to 10 percent by 2010 as part of the country's efforts to fall in with European Union aims to reduce the bloc's carbon footprint.
The German ADAC motorists club said that up to three million cars on German roads would have problems with the new fuel but the VDA automakers association on Thursday put the number at around 360,000.
"The German automotive industry has done its homework and stuck to its word," VDA president Matthias Wissmann said in a statement.
Environment Minister Sigmar Gabriel had said that the project might have to go back to the drawing board if the number of incompatible vehicles was over one million. He is to give a press conference on Friday on the plan.
The big unknown is foreign manufacturers, however, who have yet to say how many of their cars will not conform. The VDIK, the association of foreign carmakers in Germany, said they would make a statement later this week on the matter.