Automotive industry is the investment leader

The transformation of the German automotive industry is in full swing, and the sector is on the path to a digital, sustainable mobility of the future. Investments in research and development (R&D) are crucial to advancing developments in fields such as autonomous driving, data-driven business models, digitized and sustainable production, and the transition to alternative drive systems.

Every year, the European Commission publishes its "EU Industrial R&D Investment Scoreboard" which compares the world's most R&D-intensive companies based on their R&D investments as part of a competitive analysis. VDA analyses of the corresponding dataset in the current edition show that global research and development investments by German automotive companies increased by 11% year-on-year in 2023, amounting to €58.4bn.

Internationally, automotive companies with German headquarters account for around 32% of the industry's global R&D investments. In other words, almost one in three euros invested by the automotive industry worldwide in major future-oriented topics came from German companies in 2023. At the EU level, spending by German manufacturers and suppliers even accounted for as much as 70% of the global research and development investments made by European automotive companies in 2023.

While Germany remains by far the leader in global investment in automotive research and development, other countries such as Sweden, China, South Korea, France and the Netherlands also significantly increased their commitment in the same year.

The automotive industry will remain the powerhouse of Germany's innovation landscape in 2023. According to the Stifterverband für die Deutsche Wissenschaft (Donors' Association for the Promotion of Sciences and Humanities in Germany), internal research and development expenditures by German-based automotive companies in 2023 amounted to just over €30.3bn. This corresponds to 34% of the German economy's total internal R&D expenditures.

By comparison, the electrical industry accounted for approximately €14.2bn (16%), while the information and communications sector and mechanical engineering each accounted for €7.6bn (8% each). Together, their share is just under 33%, which is even lower than the automotive industry alone.

Compared to 2022 (€28.7bn), the industry recorded a growth of 6%. This continuous increase underscores the strong commitment of automobile manufacturers to technological change, for example in the areas of electromobility, automated driving, and climate-neutral production processes.

From 2025 to 2029, manufacturers and suppliers of the German automotive industry will invest around €320bn in research and development worldwide. The focus of these investments will be on the transformation, particularly electromobility, including battery technology, autonomous driving, and digitalization. This means that our manufacturers and suppliers will invest an estimated €64bn annually in research and development worldwide during this period—thus further increasing their R&D spending.

In addition to R&D investments, the German automotive industry will invest a further €220bn in tangible assets between 2025 and 2029, which will be used worldwide by the German automotive industry, for example, to build new factories, convert existing plants, equip them, and invest in other capital goods.

Sources: EU Industrial R&D Investment Scoreboard 2024, Stifterverband für die Deutsche Wissenschaft e.V., VDA