Expert warns of 'toxic mixture' damaging European car industry

Germany's car industry is losing more and more ground to its global competitors, according to leading expert Ferdinand Dudenhöffer.

"It is a toxic mixture from Berlin and Brussels that is causing great damage to Germany as a location for the car industry in the long term," said Dudenhöffer, the director of the Center Automotive Research in Bochum.

The winner, he said, is the car industry in China, which is constantly increasing its cost advantage with electric cars.

The share of battery-powered vehicles (BEVs) in new car sales in China rose to 25.7% in the first half of the year, while in the US 7.7% of sales were electric and in the EU the share fell to 12.5%.

"China's cost advantage in electromobility is thus being further extended, while Europe is falling further behind," Dudenhöffer said. With the large volume advantages and large capacities for battery production, e-cars are cheaper to produce in China than in Germany.

In France, Italy and Spain, the proportion of e-cars rose in the first half of the year, while in Germany it fell following the end of the purchase premium at the end of 2023.

German policies were actually preventing more electric cars from coming onto the roads and were setting the European car industry back, Dudenhöffer said.

If the current trends continue, Europe is likely to become an even less attractive market for the automotive industry in the future, he argued.