VDE Study: E-Mobility Becomes a Crucial Test for Germany as a Business Location

The German automotive industry must significantly increase its productivity and innovative capacity in new technologies. This is the conclusion of a study conducted by the VDE, which surveyed senior executives and corporate leaders from various areas of the value chain as well as politicians. These included representatives from car manufacturers, suppliers, battery producers, and research and development. However, the surveyed experts are also convinced that the German automotive industry is indeed competitive in the field of electromobility.

“We assume that electric vehicles will dominate the market in the future. Therefore, we asked how well Germany is prepared from the perspective of key players,” explains Dr. Ralf Petri, Head of the Mobility Division at VDE. “Expressed in school grades, the respondents rate the competitiveness of the German automotive industry with a grade of 3+. We cannot be satisfied with this.”

Designing cost-effective electric cars in Germany

From the respondents' point of view, Germany as a location for the automotive industry is not adequately prepared for the profound changes ahead. The fact that the industry has been doing very well in recent years has led to a loss of competitiveness. This is now taking its toll, with increasing interest rates, high energy prices, and growing foreign competition. Catching up in competitiveness, especially in the core areas of software and battery technology, is therefore seen as crucial. Manufacturing processes must be radically redesigned, including more automation. Above all, urgent solutions need to be developed for low-cost electric cars for the mass market. Otherwise, vehicles in this segment will primarily come from China by 2035.

Creating Predictable Framework Conditions

The transformation of the industry, growing international competition, ongoing global crises, high energy prices, and interest rates have all contributed to increased uncertainties. Here, politics and the economy agree that there is an urgent need for predictable framework conditions—among other things, to create more investment security. Addressing the ongoing skills shortage in software and AI areas. Besides productivity, the skills shortage is seen as the biggest challenge.