Emergency services are desperately trying to rescue 100 passengers as some – even children – hang in the air.
Horrific images of mothers and fathers clinging on to little ones have emerged as rescuers attempt to hoist them up.
A gondola hit a support pillar causing the abrupt stop which flung scared passengers around the cable cars.
A total of 32 cars are believed to have been operating at the time of the disaster.
Specialists are rushing to free all of those trapped and hanging in the air as the sun begins to set.
Some are stranded 40 metres above the water after the crash at 3.30pm local time (2.30pm UK time).
Firefighters are trying to reach the trapped passengers.
A handful of the cars appear to be stuck too high for the mobile crane which has ben brought in by specialist rescuers.
Martina and Hans-Peter Rieger, aged 60 and 62, from Dortmund, were the first rescued.
They said: “That will always be in our memory.
“Fortunately, we were also given direct hand signals that we should remain calm and there is nothing bad.”