Automotive Industry Group Urges Greater Technological Flexibility to Mitigate Job Losses

The German Association of the Automotive Industry (VDA) has raised concerns regarding potential job reductions within the automotive sector, linking these prospects to the current trajectory of industry transformation and regulatory measures at the European level. The organization projects a loss of approximately 225,000 jobs by 2035, surpassing previous estimates by around 35,000 positions.

VDA's analysis attributes this anticipated decline primarily to the shift from traditional combustion engines to electric vehicles and related propulsion systems. The organization notes that the employment outlook is closely tied to the diversity of propulsion technologies utilized within the industry. According to recent calculations, maintaining a broader technological approach could help preserve up to 50,000 jobs in Germany.

Between 2019 and 2025, the sector reportedly lost about 100,000 positions, with further reductions expected as the transformation continues. The VDA highlights that supply chain businesses are particularly affected, given their significant role in manufacturing components for combustion engines, many of which may become obsolete as electrification progresses.

The association also warns that existing European Union regulations, particularly the CO2 fleet targets for passenger cars and vans, could further intensify job losses. Under current rules, only battery-electric and hydrogen fuel cell vehicles will be eligible for new registrations after 2035. The VDA estimates that without regulatory adjustments, up to 50,000 additional jobs at German sites could be at risk.

The organization advocates for an expanded recognition of alternative technologies, including plug-in hybrids, range extenders, and combustion engines operating on renewable fuels. According to the VDA, integrating these options into the regulatory framework would help alleviate negative employment impacts while still supporting the transition towards climate-neutral mobility.

Beyond regulatory challenges, the VDA identifies several structural issues impacting Germany's industrial competitiveness. These include high taxes and social contributions, elevated energy prices, increasing labor costs, and complex administrative requirements. Industry leaders have expressed concern that such factors are contributing to a broader crisis for German and European manufacturing, accentuating the risks of industrial decline and job erosion.

Recent industry commentary has underscored the severity of the situation, with business leaders describing the current economic environment as more challenging than the disruptions caused by the recent pandemic. Small and medium-sized enterprises, in particular, report facing significant obstacles from regulatory complexity and operational costs, which threaten their viability and the sector's overall resilience.

In summary, the VDA calls for a balanced and technology-neutral policy approach from European authorities, emphasizing that such a strategy would not only bolster employment but also facilitate the ongoing shift towards environmentally sustainable transportation. The association maintains that supporting a mix of propulsion technologies, rather than imposing exclusive mandates, is essential to safeguarding jobs and maintaining the automotive sector's strength in Germany and across Europe.