German cars have lost the valuable China and Russia markets and are facing stiff competition at home from China. Lots of jobs going here:
Germany’s Volkswagen is to cut up to 100,000 jobs and reduce and eventually stop production at some plants, according to reports.
The company has refused to comment on reports of a management presentation at a board meeting outlining dramatic cost cutting, but if it goes ahead it would mean Volkswagen doubling previously announced staff reductions.
VW has been a slow moving train wreck. Leadership has warned for years the cost structure is unsustainable. This is the danger of both state partial ownership and a union that holds considerable power and influence in the decision making of the Company. It limits the ability of the company to react, adapt and compete.
Tesla’s Berlin factory builds a car in 1/3 of the time and at a labor cost that is often significantly less.
It’s entirely possible that at some point almost none of VW’s and its affiliate brands will build in Germany.
We have almost always driven VW and then Audis. The build quality has declined somewhat of late, as has the quality of the interiors. Prices are still high though.
That smarts. VW was Europe’s largest EV seller in 2025, with EV sales up over 50%. Tesla sales were down almost 30%. Even with those advantages, VW is beating Telsa in the European EV market.
We’re told it’s a high quality product, so can’t be that.
Brand issues?
I believe German manufacturers are in for a world of hurt. Of course I also think so for the Detroit boys. They just don’t know it yet.
That may be turning around.
Tesla doubles EU registrations in May but BYD still leads with over 26K units
Tesla also witnessed 22.5% growth in China, its largest market outside the U.S., in May, according to a report from CnEVPost.
Earlier this month, Goldman Sachs lifted its Tesla Q2 delivery estimate to 420,000 vehicles from 405,000, citing stronger-than-expected sales data in China, the U.S., and Europe.
https://www.nytimes.com/2026/06/26/business/tesla-elon-musk-europe.html
In Europe, Tesla Sales Are Rising Despite Views on Elon Musk***
Price cuts and low-interest-rate loans are luring buyers, including people offended by the company’s chief executive.
Europeans seem to have gotten over their antipathy toward Elon Musk.
Tesla’s vehicle sales rose 77 percent from January through May compared with a year earlier, the European Automobile Manufacturers’ Association said this week. In May, Tesla sold 22,000 cars in Europe. That’s more than Ford, Nissan or Honda, even when including their fossil-fuel models.
We’ve owned and currently owne Audi’s and a Porsche and have owned VWs in the past. The Audi has some issues and would agree the build quality on the vw’s seems cheap these days.
It still continues to lose money. One of the failings of mass automakers is the focus on sales vs profitability. GM went broke selling the most cars in the world.
Blah blah blah. I’m guessing a doubling, or more than doubling of gas prices counts for the vast majority of the bump; (No diss, I love mine.)
My brother just bought one. He’s been “thinking it over” for 6 months, a year. But prices, or expiration of subsidies, or whatever kept him out. Suddenly he’s in. Gonna think oil price had something to do with it?
If gas stays high, they sell more. If gas drops back down, they sell less. (They’ll still sell some, but the Iran War is, you should pardon the expression, “jet fuel in the tank.”)
I bought my mom’s VW Taos from her. It isn’t that great.
VW made money in 2025. Profits are falling, due in part to US tariffs and competition from China, so the trends are in the wrong direction, no doubt. They need to make changes, which they are doing. We’ll see if it works out for them.
They have flirted with negative net free cash flow off and on for several years. Their problems go far beyond Tariffs and they have a structural problem that interferes with making necessary decisions to assure the longevity of the business. It highlights the advantage of Tesla just from a business culture standpoint and the flatness of decision making.
Interesting article on the subject
Germany may never recover from China’s assault on its carmakers
Beijing’s full-blown assault on the European auto market imperils the entire industry