German automotive industry facing a challenging year - E-cars in focus

The struggling German automotive industry faces another difficult year. Due to stricter EU CO₂ fleet limits, it needs to significantly increase its sluggish electric car sales; the new US President Donald Trump has threatened tariffs on imports from Europe; at the same time, from the industry's perspective, the political framework to overcome these challenges is lacking. 

"2025 must be a year of new beginnings to become the year of the turnaround," said the President of the German Association of the Automotive Industry, Hildegard Müller, in Berlin. "Not small steps, but a big leap is necessary," she demanded with regard to a new federal government. It needs less bureaucracy, lower energy prices, and a reduced tax burden.

Electric Sales Would Need to Increase by 75 Percent

To boost electric car sales again, the necessary ramp-up in charging infrastructure is finally needed, said Müller. At the beginning of the year, the statutory requirements for CO₂ fleet limits tightened once more. 

For the industry to meet these and avoid high fines, sales of purely battery vehicles (BEV) alone would need to increase by 75 percent compared to the previous year, said the chief economist of the German Association of the Automotive Industry (VDA), Manuel Kallweit, in Berlin. This would correspond to around 666,000 units and a share of nearly a quarter of all expected new registrations for 2025. 

Due to the collapse of government electric subsidies at the end of 2023, the number of new BEV registrations fell by about a quarter last year. Only around 380,600 electric cars hit the road. 

Including other electric drives such as so-called plug-in hybrids, growth would now need to be around 53 percent compared to the previous year. 

Total sales are likely to stagnate again in 2025

Overall, the VDA in Germany expects around 2.8 million new cars for 2025. This would be about the same as last year and still about a quarter less than in the pre-crisis year 2019. The markets in the USA (plus 2 percent) and China (+1 percent) are expected to grow somewhat more according to these expectations.

As a result of the industry's transformation towards electromobility, the association expects ongoing job cuts. By 2035, the process in the industry could cost a total of around 190,000 jobs, said Kallweit. 46,000 of these positions have already been lost.

"The location conditions and the overall economic situation we find ourselves in could lead to this number increasing significantly."