German Automakers Struggle as US Tariffs and Global Rivals Intensify Pressure

Volkswagen, BMW, and Mercedes-Benz face declining revenues, weak electric vehicle demand, and a 25% US import tariff, threatening their largest export market.

German automakers saw a 2.8% revenue decline in 2024, underperforming global competitors who averaged a 1.6% increase.
High investments in electric mobility have not delivered expected returns due to weaker-than-anticipated demand for EVs.
The recently announced 25% US tariff on auto imports is expected to significantly impact German manufacturers, whose largest export market is the US.
Internal challenges, including software failures, product recalls, and restructuring costs, have further strained profitability.
Analysts warn that cost-cutting measures, including layoffs, are insufficient, and German automakers must focus on strategic realignment to regain competitiveness.