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Automotive industry

EU's 2035 Electric Car Ban Faces Backlash as German Automakers Seek Flexibility

Strategic Insights

— 1 min read

German Chancellor Friedrich Merz called for more flexibility from the EU in the transition to electric cars, citing resistance from struggling automakers who fear they cannot meet the bloc's plan to phase out combustion engine vehicle sales by 2035. Merz's appeal was echoed by his ally, Markus Soeder, the leader of Bavaria state, who described the ban as "wrong" and urged more time to organize the transition. German automakers like Volkswagen, BMW, and Mercedes-Benz are struggling to build competitive electric vehicles against Chinese rivals like BYD, with over 50,000 jobs lost in the sector in Germany over the past year. Meanwhile, more than 150 businesses in the EV sector have written to EU chief Ursula von der Leyen urging her not to row back on the 2035 target.

Key Takeaways:

  • German Chancellor Friedrich Merz called for more flexibility from the EU in the transition to electric cars, citing resistance from struggling automakers.
  • Markus Soeder, the leader of Bavaria state, described the EU's 2035 ban on combustion engine car sales as "wrong" and urged more time to organize the transition.
  • Over 50,000 jobs have been lost in the German auto sector over the past year, with Volkswagen planning 35,000 layoffs between now and 2030.
  • German automakers like Volkswagen, BMW, and Mercedes-Benz are struggling to build competitive electric vehicles against Chinese rivals like BYD.
  • More than 150 businesses in the EV sector have written to EU chief Ursula von der Leyen urging her not to row back on the 2035 target.
  • The IAA motor show in Munich featured 14 Chinese carmakers, up from 10 European ones, with around 100 of the 700 firms taking part overall in the event being from China.

Statistics:

  • Over 50,000 jobs have been lost in the German auto sector over the past year (EY).
  • Volkswagen plans 35,000 layoffs between now and 2030.
  • 14 Chinese carmakers are displaying new models at the IAA motor show in Munich, up from 10 European ones.
  • Around 100 of the 700 firms taking part overall in the IAA are from China, up 40% from the last show in 2023.

Sources:

  • Friedrich Merz's speech at the IAA motor show in Munich.
  • Markus Soeder's speech at the IAA motor show in Munich.
  • EY's report on job losses in the German auto sector.
  • European Commissioner Ursula von der Leyen's open letter to EV businesses.

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