German Auto Industry Warns: Up to 225,000 Jobs at Risk by 2035 as Multiple Pressures Accelerate Transformation

On May 14, the German Association of the Automotive Industry (VDA) issued a warning that Germany’s automotive sector is facing a severe employment crisis, with an estimated cumulative loss of 225,000 jobs by 2035—equivalent to one-tenth of current positions. Since 2019, the industry has already shed around 100,000 jobs, and a further reduction of 125,000 jobs is expected between 2025 and 2035. The hardest-hit segments are traditional internal combustion engine (ICE) and transmission-related supply chains, with parts suppliers widely confronting declining orders and even bankruptcy risks. This job loss stems primarily from three pressures: First, the rapid transition to electric vehicles (EVs) is rendering traditional roles obsolete. Second, Germany’s domestic business environment continues to deteriorate due to high taxes, elevated energy prices, steep labor costs, and complex administrative procedures, all eroding the industry’s competitiveness. Third, intensifying global competition—particularly the expansion of Chinese brands into European and global markets—is steadily shrinking German automakers’ market share and profit margins in China. In response to the crisis, major companies including Volkswagen, Mercedes-Benz, BMW, Bosch, and Continental have initiated workforce reductions and strategic restructurings. Porsche announced the closure of three subsidiaries, affecting over 500 jobs. Volkswagen plans to cut €30 billion in investments, streamline more than one-third of its vehicle models, and shift part of its production capacity overseas. Hildegard Müller, President of the VDA, stated that unless the EU revises its carbon emissions policies and enhances the competitiveness of Germany’s domestic automotive industry, the pace of job losses will accelerate further. The association is urging the EU to relax its 2035 ban on new internal combustion engine vehicles, allowing hybrid models and those powered by renewable fuels to remain compliant. It also recommends lowering corporate tax burdens and simplifying administrative approvals to curb the trend of industrial relocation abroad.