EVs and the German Car Industry

While looking at Germany’s production and exports; one interesting industry that stood out to me was the vehicle industry. The reason why this stood out to me is because Germany is known as one of the most dominant vehicle producing countries, however, there has been a decline recently. After having a dominant early 2000s with a world market share of around 18%, there has been a slight decline ever since. The most noticeable decline was after 2018. I believe this could be due to the new emerging EV (electric vehicle) companies recently. With companies such as Tesla and BYD becoming extremely popular recently, it has caused Germany to have a lower share of world’s vehicle market.

The vehicle sector has played a massive role in shaping Germany’s economic journey over the years. In the past, it was a game-changer for the country’s recovery post-war, with iconic brands like Volkswagen symbolizing resilience and contributing significantly to the rebuilding process. During present times, Germany’s vehicle sectors is creating jobs and helping Germany have a trade surplus, as the sector is considered one of Germany’s largest. Both of these things that the vehicle sector is doing is helping shift Aggregate Demand to the right, increasing their real GDP. Looking towards the future, there are many German companies that are joining the effort towards sustainability by creating new EV models.

The prominence of the vehicle sector in Germany’s export economy can be seen since the post-war economic revival in the 1950s and 1960s, led by brands like Volkswagen, BMW, and Mercedes-Benz. The country strategically adopted an export-oriented growth model, positioning its automotive industry internationally and sustaining a reputation for reliability.