Europe’s industrial squeeze

The pressure is material

Volkswagen’s December 2024 agreement set out a reduction of more than 35,000 positions at its German locations by 2030 and a reduction in German production capacity of 734,000 vehicles. These are planned changes, not a tally of completed redundancies. The company cited a smaller European market and more intense competition. Source: Volkswagen Group ↗

The pressure extends into the supply chain. Bosch’s 2025 annual report records an announcement of around 13,000 additional planned job reductions, particularly at German Mobility locations. This is another announced restructuring measure, not evidence that one technology alone caused the losses. Source: Bosch ↗

For communities built around an assembly plant, a transition measured only in vehicles sold misses something essential: what happens to engineering capability, supplier investment and the next generation of skilled work?

A difficult transition is not an industrial disappearance

There is evidence of adaptation alongside restructuring. Volkswagen Group reported approximately 983,100 battery electric vehicle deliveries in 2025, an increase of 32% on 2024. Its total vehicle deliveries remained close to nine million. Source: Volkswagen Group ↗

That does not settle whether the strategy is profitable, socially fair or sufficiently resilient. It does mean that “German automakers have been removed from the market” is too crude an account of what is happening.

Follow the value, not just the badge

Our concern is a transition in which Europe finances demand while depending on external suppliers for strategically important parts of the vehicle. Ownership, assembly location, cell production and material refining should be examined separately. A European badge does not, by itself, answer those questions.

Equally, the commercial challenges of one manufacturer cannot prove that electric propulsion alone caused the whole sector’s problems. Product choices, costs, demand and exposure to different markets all deserve examination.

Our position

Industrial policy should connect decarbonisation to measurable domestic capability: competitive production, technical skills, repair, recovery and credible investment milestones. Support should have conditions and an exit path, rather than become a permanent subsidy for announced capacity.

Workers and regions should be included in the investment decision before a factory is restructured. The question is not simply how quickly Europe changes its cars. It is how much of the industrial future Europe is able to build.