The German passenger car market will not recover significantly in 2026. The German Association of the Automotive Industry (VDA) expects a moderate increase of 2% to 2.90mn new registrations—still around one-fifth less than in the pre-crisis year of 2019. One reason for this is the overall economic weakness.

The VDA anticipates nearly one million (979,000) new registrations of electric passenger cars in Germany in 2026. This represents a 17% increase compared to 2025. The forecast assumes that the federal government's planned new subsidies will be implemented swiftly. Consumers, businesses, and dealers need clarity regarding the criteria and processing of the subsidies. The process must be administratively manageable for all involved. Otherwise, many buyers will wait, and the currently positive momentum in the electric passenger car market will stall. In this case, a significantly lower sales volume for electric vehicles would be expected. According to the VDA forecast, battery electric vehicles (BEVs) will increase by 30% to 693,000 units in 2026. Plug-in hybrid electric vehicles (PHEVs), on the other hand, are expected to decline by 5% to 286,000 vehicles after a strong increase in 2025. 

Increasing global protectionism will not be without consequences in 2026

International passenger car markets are also expected to show only subdued growth next year: Europe (EU, EFTA, UK) is projected to grow by 2% to 13.4mn vehicles, and China by 1% to 24.5mn units. "While Europe remains stuck at historically low levels compared to pre-crisis levels, China is reaching a new record high despite a challenging market environment," VDA President Hildegard Müller emphasized.

A significant decline is expected in the USA (-4%; 16mn light vehicles). "Increased protectionism and the associated cost increases will not be without consequences in 2026. Companies will clearly feel the effects," Müller said.

German manufacturers' car exports from German factories are projected to decline slightly by 1% to 3.2mn vehicles in 2026. This would result in an export quota of 77.5%.

The VDA expects a slight decline of 1% in domestic passenger car production to 4.11mn units in 2026. However, foreign production of German brands is projected to increase by 1% to 9.2mn vehicles.

Germany is the world's second largest production location for electric cars

Domestic production of electric passenger cars continues its positive development: it is expected to increase again in 2026. An overall increase of 5% is anticipated—driven by a strong rise in BEVs (+11%), while PHEV production is declining (-10%). Müller: "In Germany, 1.76mn electric passenger cars are expected to roll off the assembly lines in 2026—a strong signal. Germany is thus consolidating its position as the world's second-largest production location for electric cars. The figures clearly show that the German automotive industry is continuing to go full throttle on e-mobility. It is now important that Brussels also reaches corresponding clear decisions promptly, following the German government's decision for greater technological openness."

The commercial vehicle market is operating in a challenging environment: The situation in the trailer and bodywork industry remains strained. New registrations are currently continuing to decline: by 5% overall for trailers and by 14% for heavy semi-trailers over 6 tons. This is due to weak industrial production in Germany—what isn't produced doesn't need to be transported. This directly impacts the trailer and bodywork industry, which is largely comprised of medium-sized businesses. The current level is even below the minimum reached during the COVID-19 pandemic in 2020.

The German market for light commercial vehicles (under six tons) is expected to grow again in 2026 after a slight decline this year, increasing by around 3% to approximately 286,400 units. The market for commercial vehicles between 6 and 16 tons is experiencing a sharp decline in Germany this year (-20%), but a 9% increase to 17,700 units is projected for 2026. The German market for heavy commercial vehicles (over 16 tons) is declining by about 15% this year, reaching levels comparable to the 2020 pandemic period. Based on this low market volume, a 9% increase is expected for next year.

According to the VDA forecast, the bus market volume in Germany will reach 6,200 units (+15%) in 2025. Following the strong year of 2025, the association expects a decline (-5%) for the coming year.

For heavy commercial vehicles in Europe, the VDA expects new registrations to increase by 8% to 312,000 units in 2026 – starting from a very low baseline. In the USA, an increase of 3% to 223,000 vehicles is forecast, while in China a slight decrease of 1% to 1mn units is expected.