This reliance on political lobbying rather than technological advancement was a fatal miscalculation: While executives spent the last decade fighting carbon taxes and stalling the EV transition, they ignored the reality of their primary export markets - most notably China where today German ICE cars are seen as obsolete - and the rest of the world rapidly pivoting to electric.

By choosing payday over progress, the "autobauers" & their political helpers have left the German workforce to pay the price. The looming job losses and economic instability are the direct result of a managerial class that traded their country’s industrial crown for a final decade of bloated bonuses.

    German chancellor Friedrich Merz ... 
    lashed out at German workers to
    “simply do a little more,”

A friend of mine, an engineer who works in the German car industry, recently told me that nowadays he has a lot of free time. Because the company he works for has so few orders that the company is granted "Kurzarbeitergeld" - the government pays 60% of the salary if the employees work less.

That blew my mind. If I had fewer orders, I would work more to increase the quality of my product and my efficiency. Working less as a reaction to losing market share seems completely counterproductive to me.

In reality, a way bigger impact seems to be that the Chinese govt stopped buying German cars once they could build their own (which they have been always transparent about).

Unfortunately, this misdiagnosis leads to the wrong conclusion to double-down on a obsolete business model of the car industry, instead of diversifying away from it.

> [..] spends around €10 million a year on lobbying – which sounds like a lot, but amounts to just 0.05% of VW's €21 billion R&D budget.

> The logic is clear: innovation is expensive and uncertain, whereas lobbying to keep current products on the road is cheap and reliable.

Complete non sequitur. This could more easily be read as "they don't care much about lobbying and are hard at work doing R&D instead", but then that would go very much against narrative the author is trying to spin for us here.

Also I distinctly remember industry voices being very much pro-electric, while it was dinosaur politicians fetishizing ICE cars and fighting to keep production going, long past the point VW even wanted to focus on them.

I don't think this one was a lobbying problem for once.

In addition the current government is pro fossile fuels, and parts of it are the same south germans that keep building natural gas power plants.

Those plants play an important part in driving up electricity prices in the whole country, since the same people that insist on using natural gas also refuse to split the country into electricity price zones.

The main issue I notice is how bad the communication is and how little can be done & decided. Before deploying a new Jenkins pipeline I need to speak to two different teams. It's insane how much time is lost doing meetings and syncs.

Its not just innovation, we missed and our stubbornes of just keep doing what we good at, its also china catching up and steam rolling us.

When I bought an EV, people around me told me the same thing and still do: they like the sound of engines, these EVs are not suitable for daily use, EVs will burn down, we hate renewable, we hate cables, we hate...

To match china, we would not only need to work a lot more, we would also need to work on saturdays, break a lot of labor laws we build up, reduce salary despite working more, reduce energy costs massivly and automate as much as possible.

A nitting machine from germany costs 60k. In china, with the same quality (because they catched up) is 20k. 20k!

And were i'm from (bavaria) most young man want to become Mechanical engineers because of BMW and co. No one wants to do IT (lets ignore the AI elephant in the room).

Nostalgia is not a strategy!

Historically VW has been the "people's car" - a good car that people could afford and for the longest period that was the case: affordable and rock-solid. Around the late 2000s, that changed. VWs are no longer affordable and when problems hit, they hit hard - they are both time consuming and unless covered by a warranty, expensive. Also hard to fix even if it's something simple. That problem is cascading down the entire VW Group and it is hurting everyone along the way. Some companies under the VW Group are hit very hard by this. At the same time, the second big player, Mercedes, was never really affordable but lately their image of a tank-solid machine has cracked, suffering from a similar, brutally over-engineered, unmaintainable, engineering maze as VW. BMW is in a similar state as Mercedes but with a slightly different twist: BMW's are not to everyone's taste and I am saying that as an owner myself. But these days even the most die-hard fans acknowledge that the modern designs are absolutely atrocious. Top Gear were making fun of the Porsche Panamera back in the day but looking at new BMWs, I'd pick the Panamera in a heartbeat. In addition to their hard push for anti-consumer practices and outrageously over-engineered solutions.

All of this has painted German cars in a negative way - expensive and finicky. Most of the customers were happy to pay a higher price for quality and creature comforts but there is a line between comfort and something dumb like having to visit a mechanic in order to swap a dead battery - something which should have been a simple operation that you can do on the side of the road if it comes down to it. And even though I am happy with my current car and I don't plan on changing it anytime soon, if I were in the market for a new car, I'd definitely consider other options, knowing what I know.

My suggestion to the big-3 which will start solving problems: KISS.

Germany faces much bigger problems than the auto lobby.

Here's the plain text in case you don't want to go to X:

>"I spent time in Shenzhen last year and when I saw Merz come back from China saying Germans need to work more I immediately knew what broke his brain because I lived the exact same cognitive shock

my first week in Huaqiangbei I burned through 4 prototype iterations of a motor controller board for less than a thousand bucks total, back home a friend was working on something similar and spent over 12 thousand for a single revision that took almost two months to arrive

when you live that contrast in your own hands with your own project something permanently shifts in how you see the world and it goes way deeper than speed & cost

what Shenzhen actually built is a collective learning organism, imagine 20 PCB fabs 15 injection mold shops 30 component distributors and a hundred firmware freelancers all within a 2km radius, looks insanely redundant from the outside until you realize redundancy is actually information density in disguise

I watched this firsthand with an injection mold supplier I was working with, this guy had seen a hundred founders iterate similar thermal designs over 6 months so he proactively modified his tooling before I even opened my mouth, he knew what I needed before I knew what I needed, the intelligence lives in the relationships between the nodes and it compounds daily

the west thinks about manufacturing as a cost center you optimize by centralizing…

China accidentally built a distributed neural network of manufacturing intelligence where knowledge diffuses horizontally across thousands of agents faster than any single western company can process internally

so when Merz comes back and says we need to work a bit more I think he saw the problem but COMPLETELY misdiagnosed the solution, telling Germans to work harder is like telling a horse to gallop faster when the other side built a combustion engine

the gap is ARCHITECTURAL

it’s ecosystem density, you need a custom connector in Shenzhen you walk 200 meters, in Munich you send an email and wait 3 weeks

it’s iteration speed, parallel search vs sequential optimization at the system level, it’s risk tolerance, Chinese founders ship something broken on Monday fix it Tuesday ship again Wednesday while European companies are still in the approval phase for the pilot program of the feasibility study…

and Merz only saw the surface, what he missed is the tier 2 cities like Hefei Chengdu Wuhan replicating the Shenzhen model at scale right now

BYD going from irrelevant to outselling every european automaker combined in roughly 5 years, Huawei building its own 7nm chip under maximum sanctions when every analyst said it was physically impossible & behind all of that a government that treats advanced manufacturing as an existential national priority while europe debates whether AI needs another ethics committee

I think what we’re watching is the most asymmetric economic competition in modern history and most western leaders are still framing it as a productivity problem when it’s actually an ontological one

Europe & America are optimizing variables that China stopped tracking years ago meanwhile China is compounding on dimensions the west has no framework to even measure Merz at least had the courage to name it out loud and I respect that genuinely but working a bit more inside a broken architecture just means you arrive at the wrong destination slightly faster

Europe’s answer to China is always a committee, a regulation, a 5 year strategic plan and a press conference

China’s answer to anything is ship it tomorrow and figure out the rest next week

one side is trying to predict the future the other side is building it live and adjusting in real time, that asymmetry alone tells you everything about who wins this century "

Pensions, patent/IP law, land ownership crowding out affordability...

Birth rate drops dramatically

Shocked pikachu face

Love it! Merz (and our minister of commerce Reiche) is a desaster for Germany and all of Europe. Tump attacks Iran and Gas prices hit 2,12€ (and even more) per liter and still they think betting on fossil fuels from their dictatorship-friends is a good thing.

Saving Earth is just not cost-effective (at least not for the "right" people).

Maybe these writers should go invent a new battery! No amount of German Engineering is going to beat the costs of Chinese scale.

I see parallels with unions in the U.K. in the 70s, as they were ultimately the controlling entity of a lot of industry - and they too were unwilling to accept short term pain for long term gain, which ultimately resulted in the collapse of British manufacturing, as money that should have been reinvested in plant upgrades and technology instead disappeared into exorbitant - unfathomable by today’s standards - pension plans and pay packets.

Anyway. I suppose this is just humans 101, and today it’s the German car industry insisting that eating their body weight in candy today will have no consequences tomorrow.

Ignoring EVs is a symptom and not a cause of the problems. It is impossible for these corporations to pivot or innovate, no matter in which direction.

Almost all German exports have seen a precipitous drop [0]. EV exports wouldn't have helped given that Germany's two largest trading partners (the US and China) both enacted trade barriers against foreign exporters.

When the US enacted the IRA under Biden, a large portion of Germany Inc shifted to the US [1], but the German government and EU decided not to enact subsidies [2].

Similarly, China demanded JVs for German manufacturing companies to enter the Chinese market, which Volkswagen (with SAIC), Siemens (with SEPG), Mercedes Benz (with BAIC), and others manufacturers complied with.

Germany's economy was hollowed out because Germany Inc decided to shift capacity to it's two largest unified markets.

It's not like the PRC nor the US are allowing German EV exports already - for example, all of VW's ID4s sold in the US and China are being manufactured in Tennessee and Shanghai respectively.

This is why the EU has been pushing for a "rules based order", becuase otherwise individual EU states lack export markets.

[0] - https://oec.world/en/profile/country/deu#yearly-trade

[1] - https://www.ifo.de/DocDL/EconPol-PolicyReport_41_1.pdf

[2] - https://www.cnbc.com/amp/2023/02/14/biden-ira-germany-rules-...

> Gas prices rose to $70 per megawatt-hour in Germany — it makes it 6 times more expensive than in the US

Germany was relatively fine, industrially speaking, while it still had a working relationship with Russia and especially with cheap Russian gas. It all went to the gutters when the Americans imposed their imperial will on them, on the Germans (see also the Nord Stream fuck-up), and it has been a steady downhill road for the Germans since then.

To re-iterate, there's no German economic miracle that would allow them to be competitive against other indutrialised countries (such as the US) while they have to pay two or three times more for their energy inputs.

[1] https://x.com/MyLordBebo/status/2031015804179791877

"Daddy, look, another stinky gas car!"

The kids already know it.