Vettel - winner of the German GP last year - finished eighth during the second practice session, while team-mate Daniel Ricciardo clocked the third-fastest time behind Lewis Hamilton at the Hockenheimring on Friday.
Despite Red Bull's impressive start in Germany, Vettel believes the weather in Hockenheim will define the outcome for his team.
"It was a tough day. I think to a certain extent everyone had issues with the tyres," Vettel told reporters.
"It was hot today and it will be even hotter tomorrow, so the task for tomorrow afternoon will be to get the car right for that one lap.
Vettel added: "I have won my home race before [at the Nurburgring in 2013], but not here - so I would love to tick that off the list.
"Maybe if it rains on Sunday that could help us. In dry conditions it is difficult to match the Mercedes, so let it rain."
The German driver is predicting another dominant performance from Mercedes - leaders in the constructors' standings by 158 points over Red Bull.
Mercedes pair Nico Rosberg and Hamilton are also setting the pace in the drivers' championship, occupying the top two positions ahead of Ricciardo.
"It is not easy to predict. So far [in 2014] when we have done well we haven't been too far off Mercedes," Vettel said. "It is still a bit too far to really put them under pressure, but right behind them.
"If we do well we should be in a similar situation here in Germany. The last two races we have been a little bit further away, and teams like Williams were stronger, so it is difficult to say anything else - other than that Mercedes will be strong here too."