German car industry is not giving in – dead people live longer

### Forget Tesla & BYD: BMW, Mercedes, and VW are now firing up the electric turbo ### Crisis? No way! Germany's auto giants launch a major counter-offensive ### 800-volt revolution: How Germany's new electric cars are supposed to outshine the competition ### Those who are said to be dead live longer: These 3 German electric cars show the way ###

More than just a car: The secret tech weapon that German manufacturers are now using to counter

For a long time, it sounded like a swan song for a German flagship discipline: The talk was of crisis, of overwhelming Chinese competition, and an uncatchable technological gap in electromobility. But anyone who has already written off the German automotive industry could be seriously mistaken. True to the motto "those who are said to be dead live longer," an impressive countermovement is forming behind the scenes, which will culminate for now at the 2025 IAA in Munich. With an unprecedented wave of investment amounting to hundreds of billions of euros and a new generation of electric vehicles, BMW, Mercedes-Benz, and Volkswagen are launching a strategic offensive aimed at nothing less than reclaiming technological leadership.

This offensive is a direct challenge to emerging competitors from China and US pioneers like Tesla. Instead of simply playing catch-up, German manufacturers aim to set new standards with innovations such as 800-volt charging technology, giant panoramic displays, and AI-supported assistants. The new platforms—from BMW's "Neue Klasse" to Mercedes' MB.EA—are not just technical advancements, but the foundation for an entirely new era. Here, we examine the impressive offensive of the German manufacturers, analyze their new strategies and technologies, and demonstrate why this critically acclaimed industry is determined to take its future into its own hands—despite all the challenges.

The resilience of a key industry

The German automotive industry is undoubtedly facing the greatest transformation in its history. While media reports often paint gloomy scenarios and speak of a crisis that could spell the end of German automotive dominance, the reality paints a more nuanced picture. With its current offensive at the IAA 2025 in Munich, the industry is impressively demonstrating that it is far from having capitulated.

BMW CEO Oliver Zipse summed it up when he emphasized that the German auto industry doesn't need a savior. This confident attitude reflects an industry that has recognized its challenges and is now responding with billions in investments and technological innovations. The new electric vehicle models from BMW, Mercedes, and Volkswagen presented at the IAA represent not just a new model generation, but a fundamental shift in the approach of German manufacturers to electromobility.

The strategic realignment of the German automotive giants

BMW and the New Class

With the iX3, BMW presents the first production model of the so-called New Class, the largest investment project in the company's history. The new platform promises not only a range of 800 kilometers, but also significantly more efficient batteries, shorter charging times, and faster computers. The innovative Panoramic iDrive operating concept, with a more than one-meter-wide display strip below the windshield, demonstrates the technological progress achieved by German engineers.

The Munich-based company plans to launch six New Class models by 2027 and has invested over ten billion euros in development and a further two billion euros in a new factory in Hungary. This massive investment underscores its determination to play a leading role in the global electric car competition.

Mercedes-Benz and the MB.EA platform

Mercedes-Benz is countering with the electric GLC on the new MB.EA platform. The Stuttgart-based manufacturer is relying on a roughly one-meter-wide screen, which it claims is the largest ever in a Mercedes vehicle. Particularly noteworthy is the redesigned radiator grille, which deliberately departs from previous EQ models and draws inspiration from classic combustion engines—a sign that Mercedes is rethinking its design language.

Mercedes CEO Ola Källenius announced that the entire German automotive industry is investing more than ever before with a view to the future. The European automotive industry will invest more than €250 billion in electromobility by 2030.

Volkswagen and affordable electric mobility

The Volkswagen Group is showcasing four models from the entry-level electric segment, including the ID.Polo, which will be available at prices starting at just under €25,000. This strategy aims to make electric mobility accessible to broader segments of the population. Despite the challenging economic situation, VW CEO Oliver Blume is investing €165 billion in the coming years, two-thirds of which will go into electric mobility and software.

The threat from China and the German response

The growing market pressure

Chinese competition undoubtedly poses a serious challenge. Although Chinese car brands have doubled their market share in Germany, they remain at a relatively low level at around 2.4 percent. Nevertheless, the momentum is worrying: BYD has more than quintupled its new registrations in Germany and is pursuing ambitious expansion plans.

Across Europe, the share of Chinese brands already exceeds five percent. Market observer Jato Dynamics characterizes the IAA 2025 as a "German-Chinese battle for dominance in the field of electric vehicles." With more than 100 Chinese exhibitors at the IAA, the intensity of the competition is clearly evident.

Technological catch-up

German manufacturers have recognized that they need to catch up in certain areas. The new platforms use 800-volt architecture, which enables significantly faster charging than Tesla's 400-volt models. Chip designers like Nvidia and Qualcomm are helping Mercedes and BMW achieve a higher level of autonomous driving. The virtual assistant in the new Mercedes GLC can perform complex tasks thanks to artificial intelligence from Google and ChatGPT.

BMW CEO Zipse emphasizes that Chinese manufacturers are not fundamentally more competitive than German ones. Rather, the key is to avoid becoming dependent on a single supplier and to develop battery technology in-house, even if mass production is handled by specialized manufacturers.

The international market position and export strength

Global presence despite challenges

Despite all the difficulties, German automakers remain significant global players. Their global market share is 17.3 percent, which, while the lowest figure in the past five years, still represents a respectable position. It is particularly noteworthy that German manufacturers have even been able to expand their market share in the United States.

The US is now the most important sales market for German car exports, accounting for 13.1 percent, followed by Great Britain with 11.3 percent. This export strength demonstrates that German vehicles continue to be valued internationally. Approximately 75 percent of the vehicles produced in Germany are exported, underscoring the industry's global orientation.

Relocation of production as a strategic response

German manufacturers have internationalized their production strategy. German manufacturers now produce more than twice as many vehicles in the US as are exported from Germany to the US. This strategy helps minimize customs risks and produce closer to the respective markets.

BMW benefits from its production structure, with a US plant producing 400,000 cars annually, accounting for half of its US sales. This makes the company less vulnerable to trade wars and protectionist measures.

Investments and innovation

Research and development as the key to success

German automotive companies invested €58.4 billion in research and development worldwide in 2023—more than any other nation. This sum corresponds to approximately 32 percent of the entire automotive industry's global research and development investments. Between 2025 and 2029, German manufacturers and suppliers will invest an additional €320 billion in research and development.

The focus is on the transformation to electromobility, battery technology, autonomous driving, and digitalization. This massive willingness to invest demonstrates the industry's determination to maintain or regain its technological leadership.

New technologies and business models

The new vehicle models demonstrate impressive technological advances. Thanks to 800-volt technology, modern German electric vehicles can recharge for 400 kilometers in just five minutes. Porsche is the first major automaker to bring a wireless 11 kW charging system to market.

These innovations demonstrate that German engineers have by no means been idle, but have been systematically working on the next generation of electric mobility. The software architectures are being completely redesigned, so that jerky systems and endless charging times should be a thing of the past.

Challenges and structural problems

Jobs and transformation

The transformation is taking its toll. In 2024, approximately 19,000 jobs were lost in the German automotive industry, with suppliers particularly affected. Experts warn that this may be just the beginning. By 2030, between 150,000 and 220,000 jobs could be at risk.

The situation is particularly difficult for suppliers specializing in combustion engine technology. Continental plans to cut another 3,000 jobs by the end of 2026, and Bosch has also announced job cuts. These companies must fundamentally rethink their business models and invest in new technologies.

Location conditions and competitiveness

Germany's locational conditions pose an additional challenge. High energy costs, complicated bureaucracy, and lengthy approval procedures hamper competitiveness. At the same time, companies must make massive investments in electromobility while demand has not yet seen the hoped-for upswing.

The Friedrich Naumann Foundation warns that up to 250,000 jobs could be at risk if structural reforms are not initiated. Lower corporate taxes, faster approval procedures, and lower energy costs are cited as necessary measures.

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The role of politics and regulatory challenges

The end of combustion engines as a point of contention

BMW CEO Zipse sharply criticized the EU's planned 2035 phase-out of combustion engines, calling the system a "disaster." He warned that the regulation would jeopardize investments and threaten the competitiveness of the European auto industry. Mercedes CEO Källenius also advocated for more technological openness instead of rigid bans.

Manufacturers argue that committing to a technology too early is counterproductive and call for "regular reality checks" instead of rigid targets. They fear that Europe is putting obstacles in its own way while other regions act more flexibly.

Trade policy and tariffs

Tariff policy is becoming an increasingly critical factor. Zipse criticizes the fact that the highest tariffs in the automotive industry now come from Brussels, not the White House. The EU's punitive tariffs of 31 percent against China significantly exceed Trump's tariffs of 27.5 percent.

These tariffs also affect German manufacturers that manufacture vehicles in China and export them to Europe. BMW, for example, is affected because the company produces certain models in China and markets them worldwide.

Opportunities and future prospects

Europe as a bastion of German manufacturers

Despite all the challenges, Europe remains a strength of the German automotive industry. Of the nearly 1.5 million electric cars sold in Europe, only about 105,000 come from Chinese manufacturers, corresponding to a market share of 7.1 percent. In contrast, the electric market share of Volkswagen, Mercedes, and BMW in Europe is over 40 percent.

This dominant position demonstrates that German manufacturers are by no means without a chance. They have established distribution networks, strong brands, and customer trust. These advantages must be leveraged and strengthened through technological innovations.

New value creation areas

The transformation is also opening up new business areas. Software-defined vehicles, autonomous driving, and new mobility services offer potential for additional value creation. German manufacturers are investing heavily in these areas and can benefit from their engineering expertise.

The integration of artificial intelligence, advanced assistance systems, and connected services is becoming a key differentiator. This is where German manufacturers can leverage their traditional strengths in quality and precision.

The resilience of a traditional industry

Historical perspective

The German automotive industry has successfully navigated several crises and transformations throughout its history. The transition from horse-drawn carriages to automobiles, the post-World War II reconstruction phase, the oil crises of the 1970s, and reunification – each time the industry has adapted and emerged stronger.

The German automotive industry also successfully mastered competition from Japan in the 1970s and 1980s, and later from Korea, without losing its leading position. This historical experience should provide confidence for the current transformation.

Innovation and adaptation

Current developments demonstrate that German manufacturers are capable of learning. Criticism of the first generation of German electric cars was taken seriously and translated into improved products. The new model generations demonstrate significant advances in range, charging speed, and user-friendliness.

This ability to continuously improve and adapt is a key success factor. German engineers have proven for centuries that they can solve complex technical challenges—why should this be any different with electromobility?

International competitiveness and market strategies

China as a key market

China remains a crucial market for German manufacturers, even though market shares are under pressure. BMW generates 29 percent of its global sales in China, Mercedes 33 percent, and Volkswagen even 40 percent. This dependence forces them to adapt their strategies.

German manufacturers are increasingly shifting development expertise to China to develop locally relevant products. BMW is developing innovations specifically for the Chinese market with local technology partners. Volkswagen has even developed its own Chinese platform because European development was too delayed.

This regionalization of development is a pragmatic approach that shows that German manufacturers are willing to rethink their traditional structures in order to remain competitive.

Technological differentiation

In competition with Chinese manufacturers, German companies rely on technological differentiation. While Chinese manufacturers often focus on price and speed to market, German manufacturers focus on quality, durability, and innovative solutions.

BMW Sales Director Jochen Goller emphasizes that some Chinese manufacturers' recipes don't work as well in Germany, whether it's their low prices or their approach of building a smartphone on wheels. German customers have different expectations and preferences, which German manufacturers are better able to understand and serve.

Suppliers and value chain

Challenges for the supplier industry

The transformation is hitting suppliers particularly hard. Their revenue shrank by eight percent in 2024, twice as much as that of manufacturers. Many suppliers specialize in combustion engine technology and must now fundamentally rethink their business models.

At the same time, new opportunities are emerging in areas such as battery technology, power electronics, and software. Suppliers that invest early and expand their competencies can benefit from the transformation. Bosch, for example, is showcasing innovations for software-defined vehicles at the IAA, demonstrating the adaptability of established companies.

New partnerships and alliances

The complexity of electromobility is leading to new collaborations. German manufacturers are increasingly collaborating with technology companies from other industries. Nvidia and Qualcomm are supporting the development of autonomous driving systems, while battery cell manufacturers like CATL are becoming important partners for energy storage.

These new partnerships demonstrate that the automotive industry is becoming more open and interconnected. German manufacturers are recognizing that they cannot develop all the necessary competencies internally and are entering into strategic alliances to remain competitive.

Market segmentation and product strategy

Premium positioning as a strength

German manufacturers have successfully positioned themselves in the premium segment. Premium vehicles now account for 71 percent of German domestic production, compared to less than 50 percent 20 years ago. This focus on high-quality, high-priced vehicles enables competitive production even in Germany, a high-wage country.

Porsche is the prime example of this strategy, producing its vehicles almost exclusively in Germany. The brand demonstrates that "Made in Germany" still has value for which customers are willing to pay a premium.

Diversification of drive technologies

Despite the focus on electromobility, German manufacturers continue to embrace technological openness. BMW is investing in hydrogen technology and synthetic fuels. Zipse defends this strategy by arguing that hydrogen is the only long-term alternative, as it could make Europe more energy-independent.

This diversification reduces risks and keeps options open. Should a technology gain adoption more slowly than expected or regulatory changes occur, German manufacturers are not exclusively dependent on one solution.

Labor market and qualifications

Changing requirements

The transformation is fundamentally changing the job profiles in the automotive industry. While traditional mechanical engineering and manufacturing skills remain important, demand for software developers, electrical engineers, and battery experts is increasing significantly.

At the same time, new jobs are being created in areas such as data analysis, artificial intelligence, and digital services. The Fraunhofer Institute estimates that of the approximately 200,000 jobs in the powertrain sector, only about 20,000 will actually be lost to electromobility. Most of the changes are due to normal productivity increases.

Qualification and further training

Successful transformation requires massive training efforts. Existing employees must be trained in new technologies, while simultaneously attracting new talent. This represents a significant challenge, but also offers an opportunity to prepare the workforce for the future.

IG Metall emphasizes that the challenge is significant, but manageable if the right framework conditions are created. This includes both in-company training measures and government support for qualification.

An industry in transition, but not at an end

The German automotive industry is undoubtedly going through one of the most difficult phases in its history. The transition to electromobility, competition from China, and the changing global environment pose enormous challenges. Nevertheless, it would be premature to proclaim the end of German automotive dominance.

The innovations presented at the IAA 2025 demonstrate that German manufacturers have taken the challenges seriously and are responding with technological advances and strategic realignments. The massive investments in research and development, the international focus of production, and the willingness to transform demonstrate the industry's resilience.

As we all know, people who are said to be dead live longer – and the German automotive industry seems determined to prove that it belongs in this category. The coming years will show whether the measures implemented are sufficient to defend or reclaim global leadership. The foundations for this have certainly been laid.

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