US Tariffs and EV Challenges Threaten Germany's Auto Industry

Germany faces economic strain as the US confirms a 25% tariff on car imports while domestic debates over electric vehicle incentives intensify.

The US, under President Donald Trump, will impose a 25% tariff on car imports starting in April 2025, posing a major threat to Germany's export-driven automotive sector.
Saxony's Economic Affairs Minister Dirk Panter warns that the tariffs could severely impact Germany's economy, emphasizing the need to boost competitiveness beyond tariffs.
Volkswagen faces criticism for its lack of affordable EV models and management decisions, including prioritizing dividends over reinvestment despite financial challenges.
Germany's SPD and Union parties are negotiating new EV incentives, including extending tax exemptions to 2035, social leasing for low-income groups, and reintroducing purchase subsidies.
The EU Commission, led by Ursula von der Leyen, remains committed to the 2035 combustion engine ban, despite ongoing debates about regulatory flexibility and technological openness.