FT: E. Germany Now A Hub of EV Manufacturing

Financial Times headline: The surprising revival of eastern Germany

Sub-headline: Once a byword for economic decline, the region is being transformed into the centre of Europe’s electric car industry


The arrival of the Canadians is emblematic of a massive influx of investment into the former communist east, which has become the home of Europe’s rapidly expanding electric car sector. A region that was once a byword for economic decline is turning into one of the continent’s hottest pieces of industrial real estate.

In the past couple of years, it has been deluged with new projects and investments. Most eye-catching of all was chipmaker Intel’s announcement in March that it would build at least two semiconductor factories worth €17bn in the eastern city of Magdeburg — the largest-ever foreign direct investment in Germany. It came in the same month that Tesla started production at its first European electric car factory in the eastern town of Grünheide. That comes on top of the two electric vehicle plants converted by Volkswagen in the cities of Zwickau and Dresden.

This transformation in East Germany is amazing:

The reverse is true in the east, where Volkswagen opened its first dedicated EV production line in 2019, converting a plant in Zwickau, Saxony that once manufactured the Soviet-era Trabant car and was taken over by VW after Germany’s reunification. “The region and the people are familiar with upheavals, which was certainly no disadvantage,” says Karen Kutzner, chief financial officer of VW Saxony.

The company’s aim is to manufacture 300,000 electric cars a year at the site, and a few thousand more in nearby Dresden, adding roughly 1,000 jobs in the process. The Zwickau region now has almost full employment, thanks in part to companies such as cablemaker Leoni investing about €130mn in the area to supply the VW plants.

BMW is adding hundreds of roles to its plant in Leipzig, which will build battery modules.

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