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Navigating the Future of EU's Automotive Industry
2024-12-12 11:00:09
Automotive
Regulation

Navigating the Future of EU's Automotive Industry

Image used under license from Shutterstock.com

The EU's automotive industry is at a crossroads, grappling with stringent CO₂ emissions targets and a struggling transition to electric vehicles. As sales of electric cars falter in key markets like Germany, the European People's Party (EPP) is advocating for a more lenient approach to emissions penalties. This includes allowing manufacturers to average their CO₂ balance over three years, enabling them to offset poor performance in one year with better results in subsequent years.

The EPP also proposes maintaining internal combustion engines beyond 2035, provided they run on climate-friendly synthetic fuels. However, the future of these fuels remains uncertain due to their high production costs and limited availability.

To support the industry, the EPP suggests measures such as tax incentives and subsidized leasing to boost electric vehicle sales. Critics argue these strategies may delay the necessary shift to e-mobility, risking Europe's competitiveness in the global market. Despite these challenges, the push for a technology-neutral approach aims to balance climate goals with economic realities, fostering innovation across different propulsion technologies.

Related news on that topic:

Germany Faces Economic Challenges Ahead

Germany braces for significant economic challenges as many companies plan substantial job cuts in 2025. With only 17% of firms intending to hire, the employment landscape appears bleak, reminiscent of the 2009 financial crisis. Economic experts, including Michael Grömling, predict another year of stagnation, while the Ifo Institute identifies a potential crisis in the industrial sector. The outlook is further clouded by revised growth forecasts from institutes like DIW, IfW, and Ifo, all lowering expectations for the coming years. The Leibniz Institute for Economic Research anticipates a mere 0.6% growth in 2023. This stagnation is compounded by structural issues and geopolitical tensions, which contribute to rising unemployment and limited private consumption. Major corporations such as VW, Ford, Bosch, and Thyssenkrupp have already announced mass layoffs, reflecting widespread uncertainty. The IW survey indicates that nearly 40% of companies expect production declines, with the industrial and service sectors bearing the brunt. High energy costs, bureaucratic hurdles, and political instability are additional burdens. The persistent employment growth since 2005 now seems to be reversing. Economic resilience is further tested by potential trade conflicts and the global implications of a US economic boom. In response, reforms and financial relief measures are urgently needed to stimulate demand and protect the job market. Meanwhile, the savings rate has increased, particularly among younger demographics, as individuals prepare for uncertain economic times. As Germany navigates these challenges, balancing climate goals with economic stability remains crucial.

Job Cuts Loom Amid Economic Uncertainty

A significant number of German companies are preparing for job cuts in the coming year, reflecting a widespread sense of economic uncertainty. According to a survey by the Institute of the German Economy (IW), 38% of more than 2,000 firms anticipate reducing their workforce. This sentiment stems from concerns over a bleak economic outlook, with 40% of businesses expecting deteriorating conditions. The survey reveals a pervasive pessimism, reminiscent of the 2008 financial crisis. Only 20% of respondents feel optimistic about the future, while a substantial 40% foresee a decline in their investments. These findings suggest a prolonged period of economic stagnation, with no clear signs of recovery on the horizon. Particularly hard-hit is the industrial sector, where major companies like Volkswagen, Ford, Bosch, ZF, and Thyssenkrupp have announced significant job cuts. This marks the end of a long-standing trend of employment growth in Germany since 2005, signaling a shift in the labor market dynamics. In contrast, the ManpowerGroup’s 2025 labor market barometer indicates stable employment prospects in certain regions and sectors. IT, finance, and real estate show strong demand, with Frankfurt leading in job opportunities. However, industries such as transport, automotive, and logistics face tougher challenges. Overall, the survey highlights a challenging economic landscape, with many companies bracing for reduced business activity and investment. Despite pockets of employment growth, the overarching mood remains one of caution and restraint, as businesses navigate through uncertain times.

The press radar on this topic:

DER SPIEGEL
11. Dezember 2024 um 15:31

Electric car weakness: EVP wants to avoid billion-dollar fines for automakers with accounting trick - DER SPIEGEL

Politics
Environment
Technology
VW and other manufacturers fear high fines if they do not sell significantly more electric cars. The largest faction in the EU Parliament is now coming a little closer to them and distancing itself from the end of the internal combustion engine. The by far largest faction in the EU Parliament is now speaking out in favor of the stricter climate targets for passenger cars being enforced from next year. However, this is to happen less consistently than previously planned, according to a position..
EuroNews
12. Dezember 2024 um 05:30

Electric Cars: EPP Group Calls for "Urgent" Measures to Save the Automotive Industry

Politics
Environment
Technology
The EPP proposes that car manufacturers ramp up the production of smaller, more affordable electric cars in order to avoid the impending fines for non-compliance with CO2 emission limits. This is to be facilitated by a three-year average and the crediting of electric vehicle sales.
DER SPIEGEL
12. Dezember 2024 um 06:16

Robert Habeck Wants Charging Credit for Electric Vehicle Buyers - DER SPIEGEL

Economy
Environment
Politics
Economy Minister Habeck plans a charging credit of 1000 euros for electric vehicle buyers; Tax incentives for buyers with low/middle incomes; Subsidies for battery checks for used vehicles.
Tagesspiegel
12. Dezember 2024 um 06:43

Following the French model: Wagenknecht calls for a 'people's leasing' model to save the German automotive industry

Economy
Politics
Environment
Sahra Wagenknecht is calling for a state leasing program to promote electric cars and low-consumption combustion engines, as the Germany ticket is useless for many people, the infrastructure for electric cars is lacking, and combustion engines emit climate-damaging carbon dioxide. The program is to be based on the French 'social leasing' model, which was in high demand but failed due to an empty funding pot and a lack of supply of electric cars. Automotive companies have invested billions to r..
CW

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