German Carmakers To Suffer As China's EV Boom Accelerates

vehicle (EV) market grows, a think tank has warned A think tank has warned that the slump in exports of Germany's auto industry to China in the first quarter of 2023 could be the beginning of a new long-term trend of 'strong disruption' in German-Chinese trade as China's electric vehicle (EV) mar

Charles Kennedy

A German economic research institute stated on Tuesday that the slump in German auto exports to China during the first quarter 2023 could signal the start of a long-term trend of "strong disruption" in German-Chinese commerce as China's electric car boom accelerates.

Researchers at the IW Institute in Cologne reported that German exports of vehicles and engines to China fell by 26% on an annual basis in the first quarter 2023.


Published on Tuesday. The decline in German exports from China is largely due to the drop in the export of car and engines, which will account for more than half of the overall decline.

The report's authors stated that 'there appear to be significant disruptions in the automotive industry, particularly regarding China's growing importance as an electric car exporter'.

According to the Economic Research Institute, the latest quarterly Germany - China trade data reflects'major changes' in vehicle exports.

The economists stated that if this trend in vehicle construction, a sector of the economy which was important to German export success in the past, continues, German exports will continue to decline.

They added that the exports of the auto industry, which was once a strength for Germany, could become a weakness in Europe's biggest economy.

After the pandemic, Germany also became more dependent on China for critical materials. German imports are increasing from China, while exports are decreasing - particularly for Germany's iconic auto sector.

China has a number of local and international EV manufacturers competing on the largest EV market in the world.

China, Europe and the United States continue dominating EV sales.

China is the leader

In a report published in April, the International Energy Agency said that China accounted for 60% of all global sales of electric cars.

The IEA reports that China has already surpassed its target of 2025 for the sale of new energy vehicles.

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