German Car Industry Transformation: Job Losses and Economic Ripple Effects

The German automotive industry, a cornerstone of the country's economy, is undergoing a significant transformation towards electric vehicles (EVs). A recent study by the ifo Institute estimates that this shift could lead to a loss of 186,000 jobs by 2035. This article explores the potential impact on regional unemployment rates, income inequality, and the broader economy.


The job losses will disproportionately affect regions heavily reliant on the automotive industry. According to the study, around 200,000 jobs could be lost at small and mid-sized suppliers by 2035. This could lead to higher regional unemployment rates and increased income inequality. To mitigate these effects, regional governments and policymakers should focus on reskilling and upskilling programs, as well as promoting diversification in the regional economy.


The economic ripple effects on regional businesses and industries that rely on the car industry could be significant. Suppliers, service providers, and related industries may face reduced demand and potential job losses. To address this, regional governments can provide support through targeted funding, tax incentives, and fostering innovation in emerging sectors such as e-mobility and related technologies.

The shift in demand from internal combustion engine vehicles to EVs will impact the German automotive industry's job market. While some jobs may be lost in traditional automotive roles, new opportunities will arise in e-mobility-related positions. Specific skills and training will be required for employees to transition successfully, such as battery production, charging infrastructure, and EV maintenance.


German automotive companies and the government can collaborate to create new job opportunities in e-mobility and related sectors. This can be achieved through targeted investment in research and development, public-private partnerships, and workforce training programs. By embracing the transformation and fostering innovation, Germany can safeguard employment and maintain its competitive edge in the global automotive market.

In conclusion, the German car industry's transformation towards e-mobility presents significant challenges, including job losses and economic ripple effects. However, with proactive policies and collaboration between industry and government, these challenges can be addressed, and new opportunities can be created. By embracing the shift and investing in the future, Germany can ensure a sustainable and prosperous automotive industry.