The German automotive industry is facing a serious crisis in the sector. One of the factors is the not-so-speedy transition to electric vehicles (EV), along with high expectations and set goals. While the shift to more sustainable transportation is necessary to reduce emissions, German manufacturers such as Volkswagen (VW), BMW, and Mercedes-Benz are struggling with EV sales and high production costs.
What has further complicated the situation is the removal of government subsidies for the purchase of electric cars, which has automatically led to a drop in demand, despite companies having already invested huge amounts in developing this technology.
The renowned Volkswagen, as reported by global media, has seen a 14 percent drop in sales, while Mercedes-Benz has experienced a nearly 16 percent drop. Moreover, VW is facing a surplus of about 500,000 unsold vehicles. The company has already terminated long-standing job security contracts.
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Geopolitical tensions and the unavailability of Russian raw materials further exacerbate the situation, while competition from China, which offers cheaper electric vehicles thanks to favorable production conditions and subsidies, is putting additional pressure on German manufacturers. This significantly challenges Europe’s most popular companies for decades.
Although there are no concrete solutions yet, the government is considering reintroducing subsidies for electric vehicles. However, analysts warn that the German auto industry must quickly adapt to electric mobility in order to maintain its competitive advantage in the global market. Otherwise, the crisis could have long-term consequences not only for the auto industry but also for other key sectors like mechanical engineering.
Energy portal
