Introduction

The situation in the German automotive and supplier industry continues to deteriorate. While the situation varies among companies, the situation for the industry as a whole is threatening. The challenges posed by increasing international competition, high costs in Germany, customs and trade conflicts, and a still weak European market environment are increasing. In China, German manufacturers are fighting for market shares, the USA is resolutely asserting its trade and industrial interests, and the European market continues to fall short of the sales figures of 2019. As a result, German plants are underutilized. Currently, jobs in the automotive industry are being lost in Germany every month; from June 2024 to June 2025, the number was over 50,000.

The answers to the question of how automotive jobs can be secured in Europe, and especially in Germany, are politically controversial. However, the VDA and IG Metall share some fundamental views: It is necessary to strengthen demand in the European market, maintain the European value-added share of the vehicles produced here and increase it for new technologies, and accelerate development cycles in our industry. Energy costs must be reduced, and bureaucracy must be rigorously reduced—this is something that particularly industrial SMEs depend on.

There is also agreement on significant deficiencies in the political framework. IG Metall and the VDA call on policymakers at the national and European levels to quickly create the necessary conditions to stabilize the situation and enable the German automotive industry to continue on its chosen path toward climate-neutral mobility with good employment in Germany.

This mainly concerns two issues:

1. Politicians must finally improve the framework conditions for electromobility across Europe quickly and comprehensively.

2. They must make CO₂ regulations more flexible.

Support electromobility quickly and decisively across Europe

The automotive industry is investing heavily in the main path of electromobility to decarbonize transport. By 2029, the global automotive industry will invest more than €320bn in research and development, as well as a further €220bn in the construction and conversion of factories. And by 2030, it will have around 200 battery-electric models on the market. This underscores the consistent focus on electromobility and is crucial to securing the future of automotive production and employment in Germany. However, to successfully pursue this key technology path, manufacturers, suppliers, and employees in the industry need more political support. A decisive industrial policy initiative is needed to create the necessary framework for the ramp-up of electromobility and to improve European competitiveness. Only then this transformation can be successful for local locations and secure growth and employment. 

This includes the following needs for action and measures:

• The market ramp-up of electric vehicles must continue to be supported, through tax incentives for private and commercial new and used vehicles, as well as support for access to electromobility for the entire breadth of society. Furthermore, the extension of the vehicle tax exemption for electric vehicles until 2035, announced in the coalition agreement, must be implemented immediately. Since the current regulation expires at the end of 2025, consumers and businesses urgently need planning security. It is crucial that an immediate follow-up regulation is guaranteed starting January 1, 2026, to sustainably support the ramp-up of electromobility.

• The expansion of charging infrastructure for cars and trucks is progressing far too slowly across Europe and is not distributed appropriately to meet demand. European regulation, in particular, must provide a framework to massively accelerate the expansion of charging infrastructure, including also the associated power grids.

• Charging electricity is too expensive in Germany. Prices must be brought down, especially for ad-hoc charging, through tax and levy reductions and smart regulation to increase competition at charging points. Likewise, the transparency of electricity prices at charging stations should be improved. Attractive transit models are necessary to make the development and operation of charging infrastructure financially and organizationally viable.

• There is an urgent need for action regarding bidirectional charging. The successful market launch of bidirectional charging requires an EU-wide harmonized regulatory framework and the consistent elimination of duplicate charges for ancillary electricity costs.

• Of key importance is the development of a resilient and competitive battery value chain in Germany and Europe to reduce systemic dependence on Asian suppliers. This requires targeted support for the relevant parts of the battery value chain, especially battery cell production, with the goal of rapidly scaling up production capacities.

• This requires diversification of sources of supply, particularly raw materials, through strategic trade partnerships, the development of European resources, and the rapid development of recycling capacities. Permanently competitive location factors are crucial here, too. Europe's automotive production must become more resilient in this regard.

• In order to protect and increase the European and German value added shares of the vehicles produced and sold here, the VDA and IG Metall will consult on effective concepts for this.

• Companies in the supplier industry must be supported in this difficult restructuring phase with liquidity and equity for the development of new business models.

• Electrification also goes hand in hand with the digitalization of the automobile. Policymakers should create the regulatory framework so that industry can decisively drive digitalization forward to realize innovations and value creation in Germany. Targeted funding and industrial cooperation in the technology areas of software, semiconductors, and autonomous driving should be enabled and supported. Software-defined vehicles also offer great potential for future employment.

• Also, the conditions for ramping up the market for climate-friendly heavy commercial vehicles must be significantly improved. This includes, among other things, the charging infrastructure for battery-electric trucks, including the prioritization of grid connections and grid capacities, the H2 refueling infrastructure for the long-haul truck segment with H2 fuel cells or hydrogen engines, and the promotion of depot charging for SMEs in the logistics sector. The review of the regulatory framework for heavy commercial vehicles should be brought forward and carried out immediately. 

Electromobility remains the central and right path to securing the competitiveness and employment of the German automotive industry and its locations in the future. The automotive industry is demonstrating its determination to succeed with the multitude of new BEV models currently on display at the IAA MOBILITY. At the same time, we must enable and utilize further technological solutions.

Create flexibilities in regulation

Since the adoption of the current regulatory framework, IG Metall and the VDA have pointed out that the targets are very ambitious and can only be achieved if the necessary framework conditions are created in a timely manner. Today, we must unfortunately admit: This has not been achieved sufficiently. The ramp-up of electromobility for cars, vans, and heavy commercial vehicles remains largely behind expectations a few years ago, when the targets were significantly tightened again as part of a revision. The market for battery-electric vehicles is growing too slowly, and effective measures to increase demand and create the necessary framework conditions are lacking. In addition, there are very large differences within Europe. Fleet regulation for manufacturers, on the other hand, has only a single target value for Europe, meaning that shortfalls in one member state must be compensated for by overfulfillment in other member states. Against this backdrop, the 2035 target is no longer achievable without short-term adjustments.

We welcome the fact that measures to increase demand are to be discussed in the upcoming strategic dialogue. However, the ambition in creating the framework conditions listed above is insufficient and must urgently be synchronized with fleet regulation. Even with greater success in ramping up battery-electric vehicles by 2035, it is foreseeable that in just nine years' time, the conditions for a transition to 100% purely battery-electric vehicles will not exist on the European market for new vehicles. Also, European resilience in terms of raw materials and battery supply as well as battery competitiveness against Asian rival products will not yet be in place. Despite all transformation efforts, a significant number of jobs will continue to depend on existing drive technologies and their value chains.

We therefore need a pragmatic approach to hybrid technologies and renewable fuels. According to various studies, this could secure up to 200,000 jobs across Europe.

Plug-in hybrid electric vehicles (PHEVs) and range-extended electric vehicles (EREVs) can play a meaningful role on the path to climate-neutral mobility. These technologies can have a stabilizing effect on existing value creation and thus also on employment at many companies in the industry during the current transformation. These companies now need rapid certainty about the future framework for their business.

Therefore, PHEVs should not be made unattractive at this point by tightening CO₂ assessments ("utility factor"), as currently provided for in European legislation. This would undermine the economic viability of these technologies. This would also be disastrous for employment policy in the current transformation of these locations. With a steadily improving electric ecosystem, however, PHEV technology could play a stronger role in the electrification of transport.

However, in order for PHEVs and EREVs to make their contribution to CO₂ reduction and attracting hesitant customer groups to electromobility, they must also be driven largely electrically. Manufacturers and policymakers should agree on pragmatic and effective incentives and measures to ensure the proportion of electric driving in these vehicles. 

We also need a different approach to renewable fuels in connection with electrified internal combustion engines. The EU Commission should finally present its proposal "for the approval of vehicles powered exclusively by CO₂-neutral fuels after 2035," as it has already promised several times. Rapid adjustments are necessary here to provide planning security for investors and companies and to reliably reassess the business case for this technology.

Promote employment

These measures contribute significantly to stabilizing the vehicle market and to positive employment effects.

Further growth potential lies in improving the location's international competitiveness, investment attractiveness, and technological leadership in the future technology fields of electromobility and digitalization. Given the increasing trade and geopolitical volatility in the world, a broader technological approach contributes to a more stable transformation of the automotive industry. This secures access to global markets and creates prospects for employees and the affected company locations.

IG Metall and the VDA are working together to ensure that the digital and climate-neutral transformation of the German automotive industry is successful and that the competitiveness of German industry and good employment in Germany are maintained.

IG Metall is the largest trade union in Germany and the largest single union in the world. We represent over 2 million members, including hundreds of thousands of employees in the automotive industry. Together, we advocate for fair wages, secure jobs, and good working conditions. In collective bargaining, we fight for fair pay and a better work-life balance. Through our works councils, we ensure co-determination and a strong voice for employees within companies. IG Metall is present in seven districts with more than 150 local offices. We defend locations when they are threatened and develop future prospects for the industry. Solidarity and cohesion are our strengths. We shape work—today and tomorrow. Because good work requires a strong union.

The Association of the Automotive Industry (VDA) brings together around 620 manufacturers and suppliers under one roof. The members develop and produce cars and trucks, software, trailers, bodies, buses, parts and accessories as well as new mobility offerings. We represent the interests of the automotive industry and stand for modern, future-oriented multimodal mobility on the path to climate neutrality. The VDA represents the interests of its members towards politics, the media and social groups. We work for electromobility, climate-neutral drives, the implementation of climate goals, securing raw materials, digitalization and networking as well as German engineering. We are committed to creating a competitive business and innovation location. Our industry ensures prosperity in Germany: More than 740,000 people are directly employed in the German automotive industry. The VDA is the organizer of the largest international mobility platform IAA MOBILITY and IAA TRANSPORTATION, the world's most important platform for the future of the commercial vehicle industry.

 

Contact IG Metall:
Alina Heisig
Spokesperson
[email protected]