Germany’s automotive industry, once the crown jewel of European engineering, is facing an existential crisis, as new forecasts from the German Association of the Automotive Industry (VDA) warn that up to 225,000 jobs could disappear by 2035. According to VDA President Hildegard Müller, this represents around 35,000 more lost jobs than previously estimated, highlighting the accelerating pressure on Europe’s largest industrial sector.

The figures paint a grim picture. Between 2019 and 2025 alone, roughly 100,000 automotive jobs had already vanished. Suppliers are expected to suffer the most severe consequences, as the transition from combustion engines to electric vehicles threatens large parts of the existing manufacturing ecosystem.

Müller directly linked the worsening outlook to the “serious and persistent location crisis” in Germany and Europe. Speaking to the Editorial Network Germany (RND), she warned that conditions are “visibly deteriorating,” citing “high taxes and duties, expensive energy, high wage costs, excessive bureaucracy” among the primary causes undermining competitiveness.

At the center of the controversy stands the European Union’s aggressive climate agenda and its rigid push toward full electrification. Brussels’ CO2 fleet regulations for passenger cars and vans effectively mandate that only battery-electric and fuel-cell vehicles can be newly registered from 2035 onward. The VDA argues that these rules are putting an additional 50,000 German jobs at risk unless the EU adopts a more flexible and technologically open approach.

According to the association, preserving combustion engines powered by renewable fuels, alongside plug-in hybrids and range extenders, could significantly reduce the social and economic damage caused by the transition while still pursuing climate-neutral mobility goals. Müller called for “flexibilisation and technological openness on the way to climate neutrality,” insisting that such changes could preserve tens of thousands of jobs in Germany.

Earlier this year, the VDA sharply criticized Brussels for the refusal to acknowledge the depth of the crisis. Presenting an industry survey in February, Müller accused EU officials of operating under “illusions about its own relevance,” while warning that nearly three-quarters of German automotive companies were planning to delay or cancel investments in Germany because of EU policies.

She also criticized the bloc’s promises to reduce bureaucracy as largely meaningless. Referring to European Commission President Ursula von der Leyen’s deregulation pledges, Müller argued that in reality, “the European Union introduced more legislation than at any point in the last 15 years, four laws a day. We cannot keep up with implementing them.”

The crisis is already becoming visible across the industry. Porsche recently announced the closure of three subsidiaries and additional job cuts, while manufacturers including Volkswagen and Mercedes-Benz, along with suppliers such as Bosch, Continental, and ZF have all launched cost-cutting programs. Mercedes-Benz is also continuing to withdraw from its own dealership network in Germany, selling seven locations in Berlin and Brandenburg to the British investor Global Auto Holdings. More than 1,100 employees will be transferred as part of the deal.

The worsening situation has fueled criticism from politicians. Right-wing Alternative für Deutschland (AfD) co-leader Alice Weidel criticized the EU on X, stating,  “Climate hysteria and EU central planning are driving the German industry into liquidation.” 

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1 Milliarde Verlust bei Porsche. Das muss man sich mal vorstellen. Deutschland ist im rasanten Niedergang. Und was tut die Regierung dagegen? Sie reist nach Kiew und sonst nichts. pic.twitter.com/zubwy9HesF

— Alice Weidel (@Alice_Weidel) May 13, 2026  

Weidel jibed,

And what does the government do about it? It travels to Kyiv and nothing else.