Berlin and Brussels are witnessing the consequences of an electric vehicle policy that prioritized political targets over market viability. EU penalties for CO2 emissions starting in 2025, the phase-out of combustion engines from 2035, and the earlier goal of 15 million electric cars by 2030 drove billions in investment. Demand remains weak because many buyers factor in high prices, uncertain charging conditions, and expensive public electricity. Consequently, Porsche and Stellantis are writing off billions, while Ford is cutting around 3,700 jobs in Cologne. According to media reports, top managers at Volkswagen even fear for the company’s survival; furthermore, VW plans to cut approximately 50,000 jobs by 2030. At the same time, the new EV subsidy could strengthen Chinese manufacturers by making their models cheaper in Germany.
EV policy prioritized mandates over prerequisites
The EU tightened CO2 limits, forcing manufacturers to accelerate the rollout of costly electric vehicle programs. Berlin also relied on targets and subsidies, even though charging infrastructure and electricity prices failed to keep pace. Consequently, buyers were more cautious than many policymakers had anticipated.
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This policy on electric vehicles created a twofold pressure. Manufacturers invested billions in battery-powered models, while profitable combustion-engine vehicles lost political planning certainty. This resulted in production capacities that the market is not utilizing quickly enough.
Write-downs reveal the industrial cost
Porsche reported special charges of €2.4 billion for 2025. Added to this were around €700 million related to the cancellation of its own battery production plans. In Europe, the electric Macan replaced a strong-selling combustion model but failed to match its predecessor’s sales volume.
Stellantis recorded billions in write-downs, particularly in Europe and North America. The group had to revise its expectations because customers are switching to electric vehicles more slowly than regulators demand. Mercedes also points to sales risks, as high development costs continue to tie up capital.
Subsidies exacerbate pressure from China
The new subsidy scheme is intended to boost electric vehicle sales. However, it can also lower the price of Chinese models, as it is not strictly tied to European production. Consequently, German tax money flows into a market where China already enjoys significant cost advantages.
This effect hits European manufacturers at a critical juncture. China produces battery-powered cars in large volumes and controls key parts of the supply chain. Moreover, providers like BYD are pushing into the European market with low-priced models, while German manufacturers are only just beginning to expand their mass-market offerings.
Ford and VW illustrate the cost to the workforce
Ford’s Cologne plant exemplifies the social consequences of this strategic misstep. The company heavily retooled the factory for electric vehicles in response to political mandates for a rapid ramp-up. However, the models failed to attract enough buyers, leading Ford to cut approximately 3,700 jobs.
The situation at Volkswagen is even more alarming. According to media reports, several top executives believe the company’s very existence is at risk. Furthermore, VW plans to cut around 50,000 jobs in Germany by 2030, as costs, demand, and competitive pressures no longer align.
Costs remain high without affordable charging electricity
While new registrations are rising, they do not demonstrate the existence of a self-sustaining mass market. In May 2026, purely electric cars reached a market share of around 25 percent in Germany. Nevertheless, the earlier target of 15 million vehicles by 2030 remains a long way off.
As of early May 2026, Germany had just over 204,000 public charging points. The network is growing, yet this figure is no substitute for affordable and reliable charging options for all buyers. Consequently, a new EV policy would first need to secure affordable charging electricity, grid infrastructure, and access to charging. Otherwise, further subsidies—unlinked to specific locations—will merely drive up costs and boost competitors while European jobs disappear.
Author: Blackout News (KOB)
Sources: Volkswagen Group (18.06.26) – Auto Motor und Sport (18.06.26) – KBA (03.06.26) – Bundesnetzagentur (Stand: 22.03.26) –Tagesschau (19.05.26)