Unstrung durch Elektrik
One way or another, Germany’s powerful carmakers will pay for their Faustian pact with the combustion engine.
The logos of the German auto industry are some of the most powerful religious symbols of consumerism. We’ve all had them imprinted on our consciousness, we’ve all seen them magnifying themselves in our rearview mirrors, burning up behind us, telling us: I’m important, I’m a success, I’m better than you and you need to get out of my way. Whether you’re a corporate executive, a tinpot dictator, a cult leader or a small-time coke dealer; what better way is there to let people know you’ve made it than to be seen behind the wheel of a Mercedes, BMW, Audi or Porsche.
But in Germany, cars aren’t just a personal status symbol, but a national one too. They have served as the most striking flagship of the German federal republic’s post-war prosperity. From the 1950s onwards, the consumer boom of the Wirtschaftswunder (economic miracle) offered individual mobility to the masses. Iconic designs, like the VW Beetle, embedded themselves in the global consciousness. The car became a powerful representation of Germany’s rise from the ashes, an expression of its people’s ingenuity and work ethic, an emblem of personal freedom. The victory of western capitalism over east German socialism was also encapsulated in the contrast between the gleaming saloons of BMW and the unreliable boxiness of the Trabant.
There is a reason Germany is the only country in the world not to have a speed limit on its motorways. Economic success buys political influence. The car companies have long grouped together under their lobbying organisation, the VDA, to ensure that German transport policy has long catered to the kind of men who fantasise about putting their foot down all the way down on their Porsches, hearing the engine rev as they erupt down the fast lane of the Autobahn. It’s a free country after all, and what greater feeling of freedom is there than that?
This has been the common argument rolled out by auto lobbyists, who maintain extremely cosy relations with federal politicians. All of the big carmakers have offices in the political bubble of Berlin-Mitte, from where they can easily meet government representatives and talk shop over lunch. Andreas Scheuer, the transport minister in Merkel’s final government between 2018 and 2021, held a total of 80 meetings with auto-industry representatives during his mandate, while at the same time meeting representatives from environmental groups just once.
With such a chummy relationship, it’s unsurprising that the car companies have usually been able to depend on politicians to pull a favour for them. When your entire business model is based on pumping out large diesel vehicles, then meaningful action to address climate change is going to be a nuisance. Time and time again, the car lobby have been able to exert their influence to preserve unsustainable business models and prevent the necessary green transformation of transport policy.
In 2013, for example, the EU Parliament and Council had agreed new directives to reduce the maximum CO2 emissions threshold for new cars. Viewing a threat to their business, which increasingly consists of selling high-emission SUVs, the car lobby flexed their political muscle to torpedo the new legislation. The head of the VDA, Matthias Wissman, wrote an open letter to his friend Angela Markel, who he knew from their years spent together as CDU ministers under Helmut Kohl’s government in the 90s, which read: “Liebe Angela… We must not allow our powerful performance sector, which accounts for almost 60% of car manufacturer jobs in Germany, to be completely ruined by arbitrarily set limits.”
Sure enough, the German government intervened in the EU Council and delayed the legislation being passed into law. When it resurfaced a few months later, significant amendments had been made, such as the introduction of “supercredits”, which allowed manufacturers to offset high CO2-emitting vehicles through the production of more environmentally-friendly cars. Essentially, German carmakers were allowed to continue producing huge gas guzzlers without paying any penalties, provided they chucked in a few electric cars for good measure.
A year previously, in 2012, the German government had announced plans to introduce an efficiency label for all new vehicles to help consumers make informed choices about fuel consumption and emissions. Fearing premium manufacturers would be negatively affected, the car lobby went all out, in what Die Zeit newspaper described as “lobbying on a previously unprecedented scale’’, to influence the decision-making process. In the end, the label ranked cars according to their weight as opposed to their actual emissions. Environmental groups decried the misleading new system, in which large SUVs were often given better ratings than hatchbacks.
While sabotaging green legislation may have allowed Audi & co.to carry on their love affair with the combustion engine, the short term gains have sowed the seeds for long-term pains. While the German giants were busy lobbying to keep up business as usual, their international competitors were getting ahead with electrification and digitalisation.
This is symptomatic of a wider malaise in the German economy. The boom years of the early 2010s, when Germany became the undisputed powerhouse at the heart of a flagging Europe, caused complacency and a rigid dogma in decision-making. The political and economic establishment seemed to think that Germany could always go on importing Russian gas, exporting consumer goods to China, neglecting carbon emissions and failing to invest in public infrastructure.
Now the splintering and hostile geopolitical outlook have exposed the entire economic model of the Merkel era. As the one-time golden child of German enterprise, it’s poetic justice of a sort that the car industry is now threatened with a particularly steep fall from grace. Their biggest threat comes from a place they’ve exported to heavily this century: China.
For a good while, the emerging Chinese middle-class signified their arrival by buying German saloons and SUVs. But now up-and-coming Chinese carmakers have become world-leaders in battery technology. Lower production and energy costs give them a huge competitive advantage over their German rivals. They are taking over the domestic market, and look poised to roll over the rest of the world with affordable models in the coming decade. At the last IAA conference, the annual trade fair and shop-window for the German car industry, Chinese manufacturers like BYD stole the show with their electric vehicles for the European market.
Where does that leave the German giants? The big advantage they retain over newer upstarts is their prestige and reputation, much of which is inextricably tied up with the combustion engine.
But burning fossil fuels is, of course, bad for the climate. German public consciousness is pretty wise to the urgent peril of the environmental situation, certainly compared to many places in the world. Any big organisation has to talk the talk. For the carmakers, this means lots of foamy PR about “powering the eMobility of the future”, alongside presentation of shiny sci-fi electric models.
Leaving to one side the question of whether or not electric cars are even a viable solution for the climate crisis (spoiler: they’re not), the German carmakers are not doing a particularly good job of making the transition. Fully electric vehicles have yet to really take flight in Germany, and make up just 15% of new cars sold in the country, while 98% of cars currently on the road are powered fully or partly on petrol or diesel. All of this despite the fact an EU ban on new combustion-engine vehicles in 2035 is looming ever closer.
Instead of changing course and turning away from the iceberg, the German car companies are powering ahead towards it, confident in the belief they can shunt it aside. Although keen to create the impression that they’re committed to going green, behind the scenes the car lobby has been working hard to circumvent or sabotage the planned ban on combustion. Transport minister Volker Wissing of the libertarian FDP (known as the “Porsche Party”) lobbied hard in Brussels for an amendment to the ban to allow cars running on carbon-neutral “eFuels” to be produced from 2035. eFuels which don’t cause CO2 to be emitted into the atmosphere do not currently exist. It seems unlikely that they will by 2035. That doesn’t matter; the EU commission is considering watering down the ‘CO2 neutrality’ standard for eFuels.
It’s hard to shake off the impression that the big German carmakers have been spooked by the prospect of a Chinese takeover of the car market and are using their political influence in Brussels to allow themselves to keep doing what they do best: burning fossil fuels to make big luxury cars go fast.
Amidst a widespread populist uprising against climate policies, it seems like the planned ban on combustion engines is likely to fall through. The traditional conservative parties in Europe are readying an assault. Manfred Weber, the head of the EPP alliance of centre-right parties in the EU parliament, recently said: “We must revise the strict regulations, the combustion engine should not be unilaterally banned, instead the market and the best technology should decide.” The big car companies are also dropping their eco-façade. Mercedes-Benz once set a target of being fully electric by 2030. Now they’ve backtracked, and have said they’ll continue producing petrol cars until well into the 2030s.
Green capitalists predicted that market forces would inevitably lead to the triumph of the electric car. This is still a long way off. Despite government subsidies, electric vehicles remain expensive for both manufacturers and consumers. Germany’s substandard charging infrastructure makes fuelling up a headache compared to the traditional petrol-station method. Amidst a struggling economy and spiralling inequality, it’s perfectly understandable why less well-off people aren’t willing to spend more for an electric car when petrol models remain cheaper.
On the other end of the spectrum, the rich are getting richer and have more money to splash on luxury goods. There is good reason why Bernard Arnault, the CEO of luxury superbrand LVMH (Louis Vuitton Moet Hennessey), is now estimated as the richest person in the world. An ever higher proportion of the German car companies’ profits are coming from high-end vehicles sold to people who want to show off wealth. These aren’t people who care about the climate crisis. This explains why Mercedes have recorded record sales of their monstrous G-Class range of SUVs while simultaneously struggling to shift their prestige electric vehicles. The trend towards these antisocial urban tanks is likely the reason that the overall emissions of new cars put on the road in Germany actually increased between 2022 and 2023, while the overall emissions from traffic have not dropped at all in the past decade.
Things are going in the opposite direction they need to be. The reason for this is a very fundamental one: the German car industry, one of the most emblematic successes of industrial consumer-capitalism, is completely anathemic to any notion of climate protection. The two can’t fit together.
In her recent bestseller Das Ende des Kapitalismus, economics writer Ulrike Herrmann compellingly summarises how capitalism as a whole is fundamentally incompatible with climate protection and sustainability. The interconnected global economy has been built on the power of fossil fuels. The system needs to keep growing to remain stable. The big shakey jenga tower always needs more pieces added to its foundations to keep it from tumbling. The AI data centres will need their energy, more and more planes will fly across the skies. Clean energy is nowhere close to meeting that demand, especially now that more and more of the world’s population in the global south are looking to join the party they’d been shut out of for so long.
Billions of people from the most varied of cultures worldwide have been conditioned to fetishise Mercedes and co. They will still be able to sell cars for a long time yet, regardless of the climate crisis. Some form of reckoning will come though. Our astonishing ingenuity may take us further than the more pessimistic think, but the German car industry won’t last forever. When all is said and done, it will be looked back on as one of the most emblematic flag bearers of the doomed fossil-fuel era.