Germany’s automotive industry may be further advanced in its transition toward electric mobility than public debate often suggests, according to a new strategy paper published by Fraunhofer ISI, although the study also revealed divisions within the sector over emissions policy and the speed of change.
The survey, completed at the end of 2025, gathered responses from automotive executives shortly after the European Commission introduced its draft Automotive Package, which is expected to include some easing of CO2 regulations. Fraunhofer ISI said the subsequent political debate surrounding the proposals was not reflected in the survey results.
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According to the study, many German automotive companies reported substantial progress in adapting their businesses to electric mobility.
“More than 20% of the companies surveyed reported that they are already fully oriented toward e-mobility, and another nearly 40% said that their transformation status is advanced,” the researchers said.
Fraunhofer ISI described those companies as “pioneers or fast transformers,” while noting that other firms remain at earlier stages of the transition. Around one-quarter of surveyed companies said they had started restructuring toward electric mobility but still considered themselves in the early phase of the process. Roughly one in eight companies reported no significant transformation efforts so far.
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The study also highlighted mixed investment strategies within the sector. While more than three-quarters of respondents reported innovation activities linked to electric mobility and digitalisation over the past three years, more than one-third also said they continued investing in combustion engine technologies.
Survey participants broadly agreed on several policy priorities they expect from the German government. Around 80% of respondents called for stronger public investment in education, research and innovation, while a similar proportion supported lower electricity prices extending beyond industrial users.
At the same time, approximately three-fifths of companies viewed proposals to ease CO2 fleet targets critically, according to the study. Firms that had already advanced their electric mobility strategies generally supported maintaining existing EU emissions targets, including the planned 2035 zero-emissions requirement for new passenger cars. Companies progressing more slowly in the transition tended to support more gradual regulatory changes.
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Fraunhofer ISI said additional efforts to weaken EU emissions rules would mainly benefit companies lagging in electrification rather than those that had already invested heavily in electric mobility technologies.
“Weakening existing phase-out targets would put those companies at a disadvantage that have already made early and extensive investments in electric mobility,” the researchers stated. “Instead of frequent readjustments, the authors recommend stabilizing the existing policy mix and supplementing this with specific add-ons, in particular measures to boost demand for electric vehicles and reliable framework conditions for investments along the value chain.”
The report also examined how companies perceive political commitment to electric mobility in Germany. According to respondents, confidence in government support peaked in 2022 when Tesla opened its Giga Berlin manufacturing plant in Brandenburg.
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However, sentiment weakened after Germany’s coalition government ended electric vehicle subsidies during a budget crisis in late 2023, a move many companies interpreted as a decline in political support for electrification. Fraunhofer ISI warned that continued uncertainty could reduce confidence in future policy measures and discourage investment.
“Especially now, when CO2 fleet limits and the phase-out strategy for combustion engine technology are being discussed in Germany and at the EU level, Germany should not just listen to the appeals of slow transformers, but also take those companies seriously that have already invested in electric mobility,” Karoline Rogge, professor at the University of Sussex and deputy head of the Policy and Society Department at Fraunhofer ISI, said in a statement.
“Because it is precisely these companies that can bring Germany back to the forefront of the global innovation race and strengthen the international competitiveness of its automotive industry,” Rogge added. “Our findings show that repeatedly changing course only weakens planning certainty and Germany’s innovative strength in future technologies. The transformation of the German automotive industry will only succeed with credible and reliable political backing.”
The findings were based on 74 interviews conducted with executives from vehicle manufacturers, suppliers and other automotive-related companies as part of the EMPOCI research project, funded by the European Research Council and carried out jointly by the University of Sussex and Fraunhofer ISI.
