Recent research indicates that Eastern Germany holds significant promise in the electric mobility sector, potentially leading to the creation of thousands of jobs. The success of this transformation hinges on the European Union and Germany maintaining their commitment to phasing out combustion engines. Additionally, new strategies to boost electric vehicle (EV) sales are being proposed.

Job Prospects in the Automotive Industry

As discussions unfold in Brussels concerning the future of the automotive industry, the implications for Eastern Germany are profound. If the EU reverses its decision to phase out combustion engines, a new study suggests that the region could face substantial job losses. Conversely, if the current trajectory toward expanding e-mobility continues, the potential for job creation by 2035 is promising.

Close to half of the electric vehicles produced in Germany currently come from Eastern regions, and the stability of the regulatory environment will be crucial for realizing this potential.

Study Insights

The study commissioned by Transport & Environment (T&E) involved three automotive research institutes examining various scenarios up to 2035. If the momentum for transitioning to electric vehicles is hindered, particularly by relaxing CO2 fleet limits and reducing demand, Eastern Germany could see a loss of up to 10,000 jobs. This includes the impact of potential capacity cuts at the Volkswagen plant in Zwickau, which has been producing only electric models since 2019 and faced discussions about closure due to the company's previous crises.

Opportunities for Growth

However, if existing emission targets are adhered to, the study forecasts the creation of approximately 9,300 new jobs in manufacturing and supply chains. Furthermore, an ambitious goal to have 15 million electric cars on German roads by 2030 could result in the creation of 11,700 jobs.

One of the region's competitive advantages lies in its established semiconductor industry, which is critical for automotive applications. With strengths in chemistry and materials science relevant to battery production, along with a strong reliance on renewable energy, Eastern Germany is well-positioned for growth in this sector.

Recommendations for Investment

To capitalize on these advantages, T&E advocates for the formation of industry clusters and targeted investments in the battery supply chain to reduce international dependencies. The organization emphasizes the need for the German government to recognize the potential within its borders.

Future Policy Directions

Experts from the think tank Agora Verkehrswende urge the upcoming government to commit firmly to electric mobility. Such a commitment is essential for providing the business community with the necessary planning and investment security. The transition to climate neutrality is viewed as the best strategy for securing the future of the automotive and mobility sectors in Germany.

Stimulating Demand

Maintaining ambitious regulatory frameworks, including CO2 fleet limits, is critical. Instead of weakening regulations, support for the industry and initiatives to boost electric vehicle demand are recommended. Suggestions include revising car taxes and benefits for company vehicles.

Moreover, the government can accelerate development by enhancing charging infrastructure, especially at supermarkets and shopping centers. Enabling bi-directional charging between the grid and vehicle batteries will also be necessary, requiring quicker grid connection processes and variable grid fees.

Targeted Incentives

Agora Verkehrswende and the think tank Zukunft KlimaSozial recommend implementing a tiered incentive program for electric vehicle purchases, starting in 2025. This program would initially target lower and middle-income households and families, addressing the issue that previous incentives primarily benefited higher-income individuals. A second phase, commencing in 2027, would offer tailored support for those whose professions or lack of public transport options necessitate personal vehicles.

As electric vehicle adoption increases, it is prudent to gradually reduce subsidies, reflecting the decreasing cost differential between electric and combustion engine vehicles.

Conclusion

With the right policies and investments, Eastern Germany can transform its automotive sector, leveraging its existing industrial strengths to become a leader in the electric vehicle market.