A New International Comparative Study by C4D Consulting on behalf of the Friedrich Naumann Foundation for Freedom reveals: a lack of structural reforms and the planned EU ban on combustion engines threaten up to one in three jobs in the automotive industry, weakening its innovative capacity. Instead of technology bans, open and competition-friendly framework conditions are needed to secure the European automotive industry in global competition.
Key Industry Under Pressure
In Germany, the automotive industry is more than just one sector of the economy – it is a guarantor of jobs, innovation, and prosperity. Around 780,000 jobs depend directly on it; it accounts for about 10% of total economic output and pays billions in taxes and social contributions. When this industry struggles, the entire economy suffers.
This is not only true for Germany, but for many European countries that depend on the success of the automotive industry.
But the engine is sputtering: climate-neutral drives, stricter regulations, digitalization, autonomous driving, geopolitical tensions, and new protectionism are intensifying global competition. While emerging economies are expanding their location advantages, Industrialized nations across Europe are grappling with high energy costs, crushing bureaucracy, and a tax burden that stifles investment. In a negative development scenario, up to one in three jobs in the sector could be at risk by 2035. This warning must be taken seriously by policymakers.
Other Countries Are Overtaking – Europe Is Watching
Japan, the U.S., China, and India are relying on industrial policies that enable growth. India, for example, has become the world’s fourth-largest automotive market through market liberalization and strategic investments. Many European countries, including Germany, by contrast, debate bans, raise levies, and lose attractiveness.
Europe Is Disconnecting from Global Market
The study highlights: while electric drives are gaining importance worldwide, they do not dominate the market. The classic combustion engine remains clearly in the lead in emerging economies (apart from China) – with shares of over 90% in India, 92% in Mexico, 93% in Brazil, and 99% in South Africa. As major export nations, Germany and other European countries risk losing access to these markets with the impending EU-wide combustion engine ban. Demand there will persist – but it will simply be met by other suppliers.
An innovative industry needs freedom and openness to technology in order to remain globally competitive. The current crisis at major car manufacturers (Audi, Mercedes, Porsche) and suppliers (Bosch, Mahle, ZF) is also a consequence of self-inflicted deteriorating location conditions in Europe.
Advancing Autonomous Driving – Making Use of Legal Framework
The study acknowledges that Germany has an excellent legal framework for autonomous driving. But in practice, opportunities to test innovative pilot projects on a broad scale are lacking – unlike in China or the U.S. Federal, state, and local governments should accelerate approval processes and ensure that potential turns into practice. Otherwise, developers will move to places where they can realize their ideas more quickly.
Politics Takes The Wheel
The study makes it clear: political decisions are the decisive factor for the future viability of an automotive location. For Europe, the following holds: if the tax burden, energy costs, and regulation continue to rise, massive losses in value creation are looming.
Study’s Authors Recommend:
Technology-neutral energy and climate policy – lower costs, foster innovation.
Cutting red tape – clear rules instead of paralyzing regulations.
Education initiative & managed migration – secure skilled labor.
Lowering taxes and levies – restore competitiveness.
Global trade policy – open markets, strengthen partnerships.
Conclusion: Safeguard the Future Instead of Slowing It Down
The automotive industry is not a dying model – but it is no longer self-sustaining. The planned combustion engine ban exemplifies how misguided political decisions can jeopardize future opportunities. Anyone who wants to preserve this key industry must rely on technology-neutral solutions, reduce taxes and levies, lower energy costs, and cut bureaucracy. With the right framework conditions, Germany and the rest of Europe can remain leading locations for the automotive industry in the future.
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