(de-news.net) – Germany’s electric-vehicle market expanded strongly in May, driven by higher fuel costs, new models, and a recent government purchase incentive. Despite improved business sentiment, the automotive sector faces persistent uncertainty, declining export expectations, and warnings of significant long-term job losses linked to structural transformation and regulatory pressures.
The German electric-vehicle market recorded substantial expansion in May, with new registrations rising to nearly 60,000 units, corresponding to a 39.3% increase compared with the same period in the previous year. According to data released by the Federal Motor Transport Authority, electric vehicles accounted for approximately 25% of all newly registered passenger cars, underscoring a continued structural shift in the composition of the national automotive market. Industry representatives attributed this growth to a combination of interrelated factors, including persistently elevated fuel prices, strengthening consumer demand, and an expanding supply of comparatively affordable models. In addition, they pointed to the introduction of a new government purchase incentive, primarily aimed at middle-income and lower-income households, for which application procedures were opened two weeks earlier, as an additional stimulus supporting demand.
At the same time, sentiment within the automotive sector showed a modest improvement, although from a relatively low level. The Ifo Institute reported that its business climate indicator for the industry increased from -23.5 points in April to -20.8 points in May, reflecting a somewhat more favorable assessment of current business conditions as well as a reduction in pessimism regarding near-term expectations. Despite this improvement, analysts continued to emphasize that the sector remained heavily affected by persistent uncertainty. In particular, export expectations deteriorated sharply, falling from 11.7 points to -16.4 points, a development largely attributed to renewed tariff threats from the United States earlier in May. Although EU institutions subsequently reached an agreement to implement a tariff arrangement with the United States, the existing 15% U.S. tariffs on automobiles and automotive components continued to be viewed as a significant operational and cost-related burden for German manufacturers, even if the agreement was interpreted as partially easing immediate concerns.
VDA sees sharp rise in long-term job risk forecasts
Against this backdrop, the German Association of the Automotive Industry (VDA) issued warnings that employment losses in the sector could exceed earlier projections. Following the already substantial reduction of more than 100,000 jobs between 2019 and 2025, VDA President Hildegard Müller stated that up to 225,000 positions could be at risk by 2035—around 35,000 more than had previously been estimated. The anticipated restructuring of the industry, particularly the transition from internal combustion engine technologies to electric mobility, was expected to affect suppliers most severely, given that a significant share of employment in that segment remains closely tied to conventional powertrain production and related components.
Müller attributed this outlook to a combination of structural cost pressures, including taxation levels, energy prices, labor costs, and increasingly extensive regulatory requirements, which she linked to a prolonged competitiveness challenge affecting both Germany and Europe more broadly. In her assessment, safeguarding a larger share of employment in the automotive sector would require a recalibration of European Union policy. She argued that greater regulatory flexibility could enable the continuation of a technologically diversified transition toward climate-neutral mobility with less severe labor-market disruption, including the continued authorization of plug-in hybrids, range extenders, and internal combustion engine vehicles increasingly powered by renewable fuels beyond 2035. Under such a policy scenario, she indicated that projected job losses by 2035 could be limited to approximately 75,000 positions, while a more technology-neutral regulatory approach might preserve around 50,000 jobs within Germany’s automotive industry.
