How legacy car companies are skewing debate and slowing transition to electric cars

A survey of 74 German automotive industry managers, conducted in late 2025 by the University of Sussex and Fraunhofer Institute for Systems and Innovation Research (ISI), found that 61% of firms are advancing rapidly toward electric mobility. Only 39% were classified as slow transformers, with just one in eight companies not yet shifting to electric vehicles. The report warns that weakening combustion engine phase-out policies would penalize firms leading the transition to net-zero technologies. The survey highlights low political will to support the transformation, with managers citing inconsistent policies as a major hurdle. Germany’s recent moves—such as re-introducing EV subsidies while pushing the EU to soften its 2035 combustion engine ban—have created mixed signals. Temporary tax cuts on petrol and diesel, introduced to ease price pressures from geopolitical tensions, further complicate the industry’s shift. Project coordinator Karoline Rogge emphasized that Germany must prioritize firms already investing in electric mobility to maintain global competitiveness. The report stresses that the EU’s 2035 phase-out policy is crucial for driving change, and weakening it would disrupt planning and coordination across the automotive sector. Sudden policy shifts and funding cuts during past budget crises have eroded trust in political commitment, making companies hesitant to invest. Rogge warned that repeated course changes undermine Germany’s innovative strength and planning certainty. The report urges credible, long-term political backing to ensure a successful transition to electric mobility. The decarbonization of transport remains a key challenge for Germany’s energy transition, with millions of combustion engine vehicles still in use. Ensuring the domestic industry remains competitive while adopting clean technologies is essential for achieving a climate-neutral economy, according to the findings.