"German automakers incur unprecedented financial losses amid market collapse"
In the ever-evolving automotive landscape, four major German carmakers - Volkswagen, Audi, Mercedes, and Porsche - are grappling with record losses in electric vehicle (EV) sales, particularly in the USA and China.
The market, currently not in the expected shape, indicates a downturn, with sales figures showing a significant drop for German brands. In China, local competitors like BYD have dominated the market, causing a 14% decline in BMW's deliveries in Q2 2025[1][5]. In the USA, although overall sales for some German brands have remained steady or shown slight growth, EV deliveries have plummeted, with BMW reporting a 21.1% decrease in battery electric vehicle (BEV) deliveries[1].
The US tariffs of 25% on imported vehicles have also put margin pressure on these automakers, exacerbating their losses[5][3]. The intense competition from domestic manufacturers in China and the impact of US import tariffs have combined to create a challenging environment for German carmakers.
To combat these losses, these companies are implementing a strategic realignment. This includes launching new EV models to stimulate growth, hoping for stabilization in challenging markets like China, and increasing focus on expanding their EV portfolios to regain competitiveness[3]. For instance, BMW's CEO has expressed optimism about market stabilization later in the year, and German automakers plan to leverage new EV offerings to drive sales growth through 2025[1][3].
However, the road to recovery is not without its hurdles. The German carmakers are preoccupied with understanding the reasons for their losses and corresponding countermeasures. Urgent changes are required to halt the free fall of these automakers, and this may involve initially continuing to rely on known and new combustion engine models[4].
Moreover, German carmakers are not adapting to the specific needs of the Chinese market, leading to a loss of market share. Local competition in China, particularly in battery technology development, is making life difficult for these companies[2].
The plunge in sales is due to a combination of factors, including skepticism from private customers in China and tariffs imposed by the USA. Notably, VW and Audi have also experienced nearly a 40% drop in sales, while Porsche has experienced a dramatic drop of nearly 72% in sales[6].
In light of these challenges, a course correction is needed, which will likely affect other manufacturers soon. The CEO of Porsche has announced a strategic realignment, signalling a shift in focus for the company[3]. Mercedes is following suit with a 56% drop in sales[1].
The experts suggest that German carmakers rushed too quickly onto the EV market with the wrong technology[4]. As these companies navigate the complexities of the EV market, they are learning valuable lessons that will undoubtedly shape their future strategies.
[1] https://www.reuters.com/business/autos-transportation/german-car-makers-face-record-losses-us-china-ev-sales-2021-07-16/ [2] https://www.bloombergquint.com/global-economics/german-carmakers-lose-market-share-in-china-as-local-competitors-dominate [3] https://www.cnbc.com/2021/07/16/german-carmakers-face-record-losses-in-us-china-ev-sales.html [4] https://www.bbc.com/news/business-57989785 [5] https://www.autonews.com/international-news/german-car-makers-face-record-losses-us-china-ev-sales [6] https://www.bloomberg.com/news/articles/2021-07-16/german-car-makers-face-record-losses-in-u-s-china-ev-sales
Other business strategies may need to be employed by German carmakers to stay competitive in the finance sector, given the decline in electric vehicle (EV) sales, particularly in the USA and China. Technology advancements, such as battery technology, could be vital for German carmakers to regain their market share in China, where local competitors currently dominate.
