Germany’s double path: combustion engines and electric cars
Germany, the heart of the European automotive industry, faces a painful debate about whether to phase out combustion engines quickly or to keep a door open for traditional powertrains. In recent months, industry leaders have wavered between an aggressive EV ramp and a cautious form of “technology openness” that allows a mix of propulsion options. The debate has become a symbol of whether Germany can maintain its manufacturing muscle while the rest of the world races toward lower emissions and cheaper, battery-powered vehicles.
Ferdinand Dudenhöffer, often described as the country’s Autopapst, has sharpened the critique. In a guest column for Focus.de, he argues that maintaining a parallel path—supporting both internal combustion engines and electric drivetrains—is a strategic mistake. His verdict: it looks like a retreat to the past at a moment when Chinese manufacturers such as BYD and Xiaomi push forward with strong EV offerings. For Dudenhöffer, the risk is clear: when the big three German brands hedge their bets, they concede ground to rivals who are moving with greater price discipline and scale.
The logic—and risks—of technology openness
The idea behind technology openness is to preserve flexibility: keep multiple propulsion options available as market conditions and policy signals evolve. Proponents say this helps safeguard jobs, supply chains, and research ecosystems. Critics, however, warn that the strategy blurs a clear electrification roadmap, delaying the scale and efficiency gains essential for mass EV adoption. Dudenhöffer and co-author Haonan Zhu note that, after a period of aggressive “Electric Only” messaging, European carmakers appear to be tempering the tempo—perhaps in response to cost pressures, exchange-rate volatility, and changing consumer demand.
Costs rise while margins shrink
Transitioning platforms, engineering new engines, and complying with tightening emissions standards demand colossal investments. In Europe, those costs arrive while revenue growth remains uneven and stock prices stagnate. Critics argue that diverting precious capital into multiple powertrain programs reduces the speed and profitability of the electrification push. The U.S. market, by comparison, has shown a different mix of incentives and customer preferences, where some high-performance engines still hold appeal without the same regulatory burden, a contrast that underscores Europe’s strategic vulnerability.
China’s price pressure and Europe’s exposure
Another dynamic fueling the debate is the price competition from China. Brands like MG, Roewe, Changan, and Chery are offering vehicles that match European standards at significantly lower price points. BYD, already a global heavyweight in EVs, demonstrates that scale and cost-competitiveness can coexist with strong product performance. The European market is experiencing early signals of a cost-driven price war, with the average entry price of a German new car significantly higher than in China on several models. The CAR-Institut in Bochum has warned that this price-pressure could migrate from the EV segment into traditional combustion options, unless German automakers commit to a clear, competitive electrification strategy.
What should Germany do to stay competitive?
Analysts offer several avenues for preserving industrial leadership while accelerating decarbonization. A clearer, credible electrification roadmap is essential—one that aligns policy support, charging infrastructure expansion, and grid upgrades with predictable investment returns. Automakers may need to streamline product portfolios, accelerate shared platforms for EVs, and pursue targeted profitability in mainstream, affordable EVs rather than chasing high-end segments alone. Strengthening domestic supplier ecosystems, preserving skilled jobs, and embracing perhaps a phased, transparent transition can reduce the fear of a sudden pivot that critics link to technology openness.
Conclusion: clarity over ambiguity
Germany’s challenge is not merely about choosing between engines and batteries. It is about delivering a unified, credible path that preserves competitiveness while meeting climate and energy goals. If the industry leans too heavily on a “technology openness” narrative without delivering rapid, affordable EVs at scale, the risk is losing ground to nimble, lower-cost competitors from abroad. A disciplined, transparent strategy—one that reconciles the need for innovation with the realities of global competition—could still secure Germany’s place as a leading automotive nation.
