German auto production employs around eight hundred thousand people — with a further 1.8 million jobs indirectly linked to the industry. But even these figures don’t convey quite how important it really is. Apart from the fact that brands like Volkswagen are known the world over, the sector drives industrial knowhow upon which the German economy’s strength relies.

Today, the industry faces severe crisis. Tens of thousands were laid off last year, and many small suppliers are struggling to survive. This doesn’t just owe to the pandemic; even beforehand, sales had been stagnating as excess capacity accumulated worldwide. The management consultant AlixPartners writes that “Darwinism” has taken hold: “Only the financially secure and innovative manufacturers will survive the upcoming market shakeout.”

For decades, German car companies made exorbitant profits — but failed to invest in electromobility. Now they need to make up for lost time. The speed with which the changeover will take place became clear when the EU again tightened its climate targets. Auto CO2 emissions are to be halved by 2030. China — German firms’ most important market — is planning for one quarter of all new registrations to be electric by 2025, but it is also massively promoting its own electric car industry. Berlin’s new Tesla factory also points to the tough competition faced — especially if Tesla, as announced, will accept neither collective bargaining nor works councils in its German plants.