Forecast: No Trend Reversal for East German Electric Car Industry
After a year of stagnation, the East German automotive industry can expect slight growth in 2025, according to a current analysis. However, a real trend reversal is not in sight, said Professor Werner Olle from the Chemnitz Automotive Institute to the German Press Agency.
Thanks to new products, the factories of BMW and Porsche in Leipzig, as well as Opel in Eisenach, can expect higher production numbers and better capacity utilization. For Tesla in Brandenburg and Volkswagen in Saxony, however, a similar level to 2024 is expected. Both locations lack new products that could generate momentum.
VW significantly downsizes in Saxony
In the future, Volkswagen plans to significantly reduce capacities in Saxony. Vehicle production in the Transparent Factory in Dresden is to be discontinued by the end of 2025, and the vehicle plant in Zwickau will produce on only one production line from 2027 - and only Audi models will be made there. Currently, VW ID models and the Cupra Born are built on two lines.
The shift to electromobility is particularly advanced in the East German automotive industry. While the factories of Tesla in Grünheide and Volkswagen in Zwickau are entirely focused on electric cars, Porsche and BMW in Leipzig, as well as Opel in Eisenach, are operating on two tracks. They produce both combustion engine and electric motor vehicles.
Up to 1.45 Million Vehicles per Year Possible
According to Olle, car production in the six East German plants will total 833,000 vehicles in 2024, more than half of which (54.8 percent) will be electric cars. Up to 1.45 million vehicles per year would be possible. A 7 percent increase is expected in 2025, and even 10 percent for purely electric vehicles, Olle stated. "The capacity utilization will only slightly increase to an average of 62 percent." At the same time, the expert expects a slight decline in employment. Overall, the industry has around 150,000 employees: about 34,000 with the manufacturers themselves and 116,000 in the supplier industry.
A major sticking point for the weak demand is the price of new cars - not only for electric vehicles, explained Olle. "Even for combustion vehicles, the price level has risen significantly. They are anything but a bargain." For the future, the expert anticipates that electric cars will become cheaper and thus more attractive for consumers. The costs of batteries, which are a significant factor in new car costs, could decrease by 25 to 30 percent over the next few years.
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