Lies, Özdemir and Söder demand greater support for the automotive industry
In a joint position paper, the state premiers of Baden-Württemberg, Bavaria, and Lower Saxony are calling on the federal government and the EU to take concrete measures to secure the competitiveness of the German automotive industry.
Production of the electric Mercedes-Benz GLA in Rastatt
Image: Mercedes-Benz
In an unusual move, the three German federal states most heavily shaped by the automotive industry have outlined numerous demands to support the sector – addressing these points to both the German federal government and the EU in a joint position paper.
The cross-party paper is signed by the minister-presidents Olaf Lies (SPD) from Lower Saxony, home to Volkswagen’s headquarters in Wolfsburg and several of its plants; Cem Özdemir (Greens) from Baden-Württemberg, where not only Mercedes-Benz and Porsche are based but also globally renowned suppliers Bosch and ZF; and Markus Söder (CSU) from Bavaria, the heartland of BMW.
Notably, among the statements from the three minister-presidents, it is the Green Party’s Cem Özdemir – whose official car is a fully electric Mercedes-Benz EQS – who is the only one not to explicitly address electromobility. Instead, he paints a broader picture of the automotive industry: “Europe must transition from a continent of regulation to a continent of innovation. That is the message we are sending together to Brussels. We need less bureaucracy and more investment in batteries, semiconductors, and our own key technologies. The EU must protect our industry more strongly than before from unfair competition, rather than standing idly by as heavily subsidised imports displace our domestic value creation.”
Özdemir continues: “To restore fairness in international competition, we should make greater use of strategic protective instruments in Europe without isolating ourselves. This requires a strong European industrial policy. We want not only to drive cars but also to build them here in Germany.”
“Made in EU” regulations must be introduced
What Özdemir means by this: the Industrial Accelerator Act, first proposed by the EU Commission in March, must be swiftly debated and adopted. According to the premiers of these states: moderate yet clear, uniform, and practical Local Content rules and “Made with Europe” criteria are required to secure European value creation. This should be implemented in cooperation with the EEA and EFTA states (Iceland, Liechtenstein, Norway, and Switzerland), the United Kingdom, and other established partners.
Lower Saxony’s Minister-President Olaf Lies, on the other hand, emphasises the need to support the automotive industry primarily on electromobility: “Electromobility remains the central future technology in the automotive sector. At the same time, we see that the transformation of the industry is taking longer than originally expected. Therefore, companies and employees need reliable and flexible transitional solutions on the path to climate neutrality.” He emphasises that the everyday usability of electromobility is crucial, which is why charging prices must be kept to a minimum through a lower electricity taxes.
Lies further stresses: “High-performance and ecologically sustainable battery technology is central to the mobility of the future and thus to Germany as a business location, because without it, the foundations for new value chains, job retention, and a strong automotive industry in the future are missing. Additionally, the federal government’s funding should in future also focus more on used electric vehicles to make electromobility attractive and affordable for even more people.”
Söder advocates for technology neutrality
Bavaria’s Minister-President Markus Söder, despite mentioning electromobility, does not want to commit to a single type of powertrain. He appeals to the EU Commission: “Priority for technology openness and no to bans. We finally need a real exit from the rigid combustion engine phase-out, a comprehensive reform of CO₂ fleet limits, the prevention of penalties at the EU level, and a massive reduction in bureaucracy. In addition to expanding electromobility, the high-tech combustion engine also has a future. Germany and all of Europe need the car. It would be a serious mistake to leave our expertise to foreign countries. Overall, we must focus much more on innovation and high-tech, as these are where prosperity and jobs lie in the future.”
The position paper, which you can download as a PDF (in German), is six pages long. The demands of the three minister-presidents for the automotive industry can be summarised in the following key points:
An industrial policy for competitive framework conditions
- Reduce energy and labour costs; expand infrastructure.
- Significantly reduce bureaucracy and approval procedures.
Realistic EU regulation of the energy transition
- CO₂ fleet rules should be made more flexible and technology-neutral.
- 2035: 90 vs 100 per cent CO₂ reduction, give greater credit to e-fuels, suspend the PHEV Utility Factor.
- No mandatory EU corporate fleet quota; review CO₂ rules for trucks.
European technology and investment policy
- Targeted promotion of key technologies such as batteries, semiconductors, software, hydrogen, and synthetic fuels.
- Establish a European battery industry (“Airbus for Batteries”).
- Strengthen Europe in software, AI, and autonomous driving.
- More scope for state support of the automotive industry.
Reform purchase incentives
- Extend EV funding to used vehicles.
- Examine investment funding for new technologies and production facilities.
Lower charging electricity prices and make charging infrastructure more attractive
- Reduce state price components for charging electricity; lower electricity tax to the EU minimum level.
- More charging infrastructure, particularly fast chargers, in rural regions and for heavy-duty commercial vehicles.
Trade policy: a level playing field and European sovereignty
- Address competitive distortions and critical dependencies.
- Extend anti-subsidy measures, i.e., special tariffs, to plug-in hybrids as well.
- Advance Local Content and “Made with Europe” rules.
Act now
* The federal government and the EU should quickly implement measures to strengthen the European/German automotive industry – with competitive framework conditions, protective instruments, and fair trade.
The background to the position paper includes the ‘alarming’ impact of the automotive industry’s transformation, with tens of thousands of jobs already lost in the German automotive sector since the employment peak in 2018, particularly in the supplier industry. Last year alone, around 52,000 jobs were lost. For Germany to remain a core automotive hub in the future, there needs to be a timely and significant improvement in framework conditions and decisive countermeasures where negative developments are visible – at least, according to Olaf Lies, Cem Özdemir, and Markus Söder.
baden-wuerttemberg.de, bayern.de (Statements) (links in German)