From Ars Technica · · 1m 20s
Germany's car industry faces collapse
Factory closures loom as German automakers struggle with Chinese competition, tariffs, and the EV transition.
In brief
Factory closures loom as German automakers struggle with Chinese competition, tariffs, and the EV transition. Germany's automotive dominance is crumbling due to weak demand, Chinese competition, US tariffs, and poor EV strategy, forcing major job cuts. Originally reported by Ars Technica.
Germany's auto crown slips
German car makers were economic crown jewels for decades, but now face declining demand, Chinese competition, and punitive tariffs that threaten their dominance.
European car sales collapse
European automotive sales plummeted from 18 million vehicles in 2019 to 13 million in 2025, with Chinese makers capturing growing market share.
US tariffs hit German exports
New 25 percent import tariffs on US vehicles threaten Germany's most profitable market, with rates subject to change at any time.
Porsche's EV bet backfires
Porsche built too many electric vehicles and sold too few, causing its profit margin to fall below Skoda's and forcing VW Group to write down 11.5 billion dollars.
Factory closures now likely
Volkswagen is considering closing four German factories, while Mercedes-Benz warned it might shut one assembly plant and one powertrain plant unless costs drop.
“We have absolutely no time to lose and will therefore significantly step up our performance program.”
Workers protest across industry
Employees at Audi, BMW, Mercedes-Benz, Porsche, VW, and suppliers protested yesterday, demanding corporate leaders take responsibility for jobs and Germany's automotive future.
“We expect corporate leaders and management teams to take responsibility for Germany as an automotive nation, for employees and for jobs.”
The bottom line
Germany's automotive dominance is crumbling due to weak demand, Chinese competition, US tariffs, and poor EV strategy, forcing major job cuts.
