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.
There's a lot at play, which in combination led to this "perfect" storm.
Energy policies and hence ever increasing energy prices, bureaucracy almost as bad as Italy, governements making technical decisions for unprepared manufacturers by setting goals of EV production numbers and above all phasing out the cornerstone of the countries engine, literally: ICE power units.
And yes, most management are of an era that truly doesn't understand the convergent challenges in a mixed market of ICE and EVs. Shortsighted decisions have been made, throwing out the baby with the bathwater - craftsmanship, vision and engineering prowess.
What was an engineering driven industry with a say in where all this is headed became a soulless marketing machine, merely scratching the surface of what needs to be done.
They created some very bad "sci-fi" by plastering screens everywhere in interiors while still treating software like some part you can outsource to the lowest bidding supplier, swapping these out every other model range or update.
Actual internal research and guidance got killed off around the early 2010s by outsourcing all of it externally.
Besides, the culture and politics within these corporations are the worst i ever encountered in my whole career.
It's a very grim picture we're looking at but there's nobody, neither in upper management across boards nor in politics actually being able to see the misery they're in, let alone doing something about it.
Glad i left almost 10 years ago but still sad, since all I had to witness is effecting society as a whole and not in a good way.
It's really just the beginning of what is to come.
They had roughly two decades to adapt, but instead they often relied on strategies like pressuring German workers with the possibility of relocating production to Poland to keep wages down, while investing little in research and development during a period when sales were strong and new markets, such as China, were opening up.
This might be one of the reasons I should not buy an apartment and settle in Germany...
Literary aside, there used to be a time when you could count on a company and they could count on you. Now it’s a culture cult. This makes whistleblowing and doing what’s right virtually impossible. Who wants to sacrifice everything? Only the scorned and mistreated or it has to be egregious enough to solicit public outcry.
I'm sorry, but WTF?
This is the most unhinged drivel about German nuclear I have ever read on HN, and that's saying something.
There no problem with "trust in electricity", whatsoever, nor is there any lack of a "solid base". There has been no electricity grid collapse in Germany for decades(in stark contrast to the US, or f.e. Spain). Any problems with electrcity have been due to terrorism or building errors.
Even with that, in case you haven't noticed, EV cars run on batteries and don't need constant power. Perhaps for "preppers" or people living in remote areas it would be a factor, but I have never in my life heard anyone connect the use of EV power with the power station the charging comes from or how reliable the grid is.
Germany is not in a position to continuously meet its own electricity needs, but is dependent on daily aid deliveries of electricity from abroad. The electricity needs of industry cannot be met in a market-oriented manner, but taxpayers have to spend additional money so that industry can continue to produce at all.
The absurdly high prices for electricity in Germany prevent any competitiveness. Ignoring all of this can only be described as WTF – what country do you actually live in?
The problem is that other countries also have solar and wind power during the day and don't need this electricity at all. That's why Germany has to “sell” this surplus electricity, even though no one needs it. To ensure that the electricity is still "purchased", Germany has to pay money for it. In the evening, Germany has to pay money to buy back the missing electricity.
Paying money to have something purchased is generally referred to as garbage fees.
That is totally wrong. Germany does not have battery capacity nor the power grid to transfer all the power to right places at the right time.
"We just don't do it because it's cheaper to buy i.e. heavily subsidized nuclear power from France"
Oh yes, market rules are a bad thing. Anyone who produces something more cheaply is simply lacking solidarity.
Another big lobbyist is chemistry industry. They are very reliant on gas.
The entire ecosystem of automaking is just like tech - clusters of complimentary industries. There's a symbiotic relationship between Mercedes, Ford, BMW, GM, etc and their suppliers -- many of whom in the american case were former subsidiaries of the automaker.
That's why Ford, GM, Porsche, Mercedes, BMW, etc have a hard time closing the deal on EV. The American car companies are more fucked because they've engineered the business around compliance requirements to mostly only make trucks. It's hard to eat your children. Meanwhile, BYD isn't run by a bipolar drug addict, and they are going to back up the truck, slowed down only by protectionism. I drove one when traveling, and it felt like driving a Tesla in 2015.
For companies building cars in Germany, the US and to some extent Japan & Korea, we're living in a do-over of 1976, except China is Japan.
I think the executives at these companies have long since identified that EVs are a far more fundamental existential challenge than people normally understand. The reason I think so is that Internal Combustion Engines are the primary barrier to entry into the car market. In an all electric world they are once again open to competition from startups who can source the same commodity motors, batteries, controllers, and the like. The barriers to entry drop and it becomes a brand new world of competition from all sides. The only major stumbling block being regulatory (crash testing, etc...). Nobody in the industry wants that, so the best solution is to fight the EV adoption as long as they can. Had Tesla not been a company they would still be dragging their heels with compliance cars to this day.
Of course countries without existing ICE manufacturers to protect, like China, are free to take control of the EV market and dominate the auto industry in the coming decades. An existential crisis for legacy automakers.
People hold up China as an example but China was not displacing any local industry including its own. It's incredibly easy to do that because it's greenfield. Fast forward 20 to 30 years when new thinking might impact BYD or CATL's bottom line? They may not look so forward-thinking.
I would add that despite joint ventures, China's domestic internal combustion engine industry never really caught up. In fact their best engines were made by wholly domestic companies but those were not nearly as good as those made by Western and Japanese companies.
As Warren Buffet noted over a decade ago, BEV is an opportunity for China to simply skip over all of that and just leapfrog everyone else. So it's even better than greenfield. It's green field for them while allowing them to completely disrupt existing foreign competitors.
They not only didn't have a local industry, they knew they couldn't make one and adjusted government policy.
Turns out, the real moat of any successful car industry so far wasn't brand recognition, lobbyists, tariffs, or the pleasing sound of a shutting car door. It's the combustion engine itself. Or rather the industry you're embedded in that provides the metallurgy and chemistry to reliably produce high quality engine blocks and seals. Because your engine needs to withstand high pressures and temperatures that go from below freezing all the way up to way over 2000K. And you also need the know how and experience to build all of that together.
None if that can be exfiltrated as a zip file or wished into existence by party officials.
The EV sidesteps all of that in one go. Now it's all down to who has the best batteries and who can do high quality assembly real cheap. Both points go to China.
Why? The same reason: The surrounding industry. It's what you get from doing (even simple) electronics for decades, cultivating a competitive industryfor assembly and high quality battery cells.
The only hope for the incumbents was hydrogen instead of batteries because this again is engineering and seals.
The alternative would have been to become really good at batteries themselves. However, Europe's best chance to get there, Bosch, decided in 2018 not to go that way [2].
Once you let all of that sink in, you realise the inevitability of the current situation.
And they knew. All this time they knew. The rest was song and dance for politicians and shareholders.
[1] https://www.economist.com/technology-quarterly/2020/01/02/ch... [2] https://www.reuters.com/article/business/bosch-shuns-battery...
This is also reflected in the big political parties, which would rather keep these beliefs alive than inspire change.
I really don't see a solid economic future for Germany when enough other countries implement more progressive economic policies.
The willingness to change is there, it's mostly the motives and what is being targeted where the problems are.
We as a country lost our balls.
Decisions are increasingly made on an emotional basis, and the poster child for this has been the politically calculated exit of nuclear power based on the Fukushima accident to gain an election win.
Most of senior management is trying to act like suddenly they are some cool nimble startup CEO that can burn through cash until the subscription fees for lane keeping assists and heated seats are paying the bills.
It's all buzzwords being thrown around without anyone really caring for reality.
Just looking at how the "dress code" changed over the last 10 years in automotive is funny by itself.
Hefty statements, zero backing and ever shrinking balls.
The bill is going to be huge.
Interestingly it's not only the domain of the conservatives (e.g. CDU/CSU) to cut any discussion this way. Social democrats (and their voters) use the same argument, just in instances where it fits their program (e.g. labour laws).
> I really don't see a solid economic future for Germany when enough other countries implement more progressive economic policies.
The only party suggesting any such policies consistently fails to clear the 5% threshold as of late. Evidently, the electorate is satisfied with the status quo.
Lobbies also moved Germany out of solar panel production, batteries and lately heat pumps.
So yeah, the legacy industry lobbies are the problem but not exclusively the automaker ones.
Was it lobbies, or costs which aren't competitive with China?
Our current Chancellor (Merz) publicly boasts that Germans work too few hours and calls on them to work more [0] implying this would generate more tax revenue. Yet working has arguably never been less rewarding for workers: Germany currently has the 2nd highest tax wedge among all OECD nations (≈48% for a single worker, nearly 13 percentage points above the OECD average) [2][3]. This is compounded by demand-side welfare measures for low earners such as Wohngeld (housing benefit) and pension supplements like Mütterrente ("Mothers' pension"), creating a massive redistribution from working people to non-working people.
Meanwhile, the German government has spent years failing to fully prosecute the CumEx/CumCum tax fraud scandal, a scheme through which banks and investors systematically robbed the German state of an estimated €36 billion in tax revenues [4][5]. The contrast could not be more glaring: squeeze workers harder while letting financial fraudsters off easy.
I've handed over my resignation for my FAANG job and am looking for a job in other countries as I don't see myself building a future here.
- [0] Merz urges Germans to work more CGTN (Feb 2026): https://news.cgtn.com/news/2026-02-28/Merz-says-Germany-must...
- [1] EUFactCheck Merz's claim rated "Mostly False": https://eufactcheck.eu/factcheck/mostly-false-we-need-to-wor...
- [2] OECD Taxing Wages 2025 Germany: https://www.oecd.org/content/dam/oecd/en/publications/report...
- [3] Tax Foundation Tax Burden on Labor, OECD 2024: https://taxfoundation.org/data/all/global/tax-burden-on-labo...
- [4] CumEx-Files Wikipedia: https://en.wikipedia.org/wiki/CumEx-Files
- [5] Stanford GSB CumEx and CumCum Scandals: https://casi.stanford.edu/news/germanys-cumex-and-cumcum-fin...
You quit your job at a large US company because you do not see yourself building a future in Germany?
Worst case I'll end up being on unemployment insurance for a year, ~ 2800 EUR per month while travelling the world in my late twenties...
When property costs 1 million+ (the case in Berlin/Munich), financially it really doesn't matter whether I net 6500 EUR month working 50+ hours for FAANG or 4500 EUR working 35 hour weeks for a German corporate, even though the gross salary for the FAANG job is twice the German job.
Financially in the first case you can afford a mortgage on said property (barely, with some help from parents/partner, maybe aiming for something slightly out of the very city centre), in the second case you cannot. Also, 4500 net for a 35-hr week is something you will not easily find in a German corporate: at that level, levels.fyi only lists non-German multinationals. Unless you become a contractor, or rise really high on the corporate ladder.
But I agree on the rest of your comment, and I have also left Germany because of the massive amount of money that the government feels entitled to take from the pockets of the so-called “top earners” (i.e. anybody making the equivalent of 70'000 $) while giving back barely anything in terms of services.
If that is lacking, German population mentality is worse that I thought, less efficient, more incompetent social-state-feed-lazy-me model, which is of course unsustainable. Ungood in global times, very ungood.
I have a friend who works quite high in sales for BMW directly in Munich, and even despite his general politeness he... isn't happy where company and Germany overall is heading. Was a big proponent of green deal before when everything was rosy, finally understood what a shoot-your-own-feet idiocy that was. Eastern wing of EU was screaming all this since beginning since this is by far the #1 issue they have with EU, but nobody in Brussels or Bonn gave a nanofraction of a f#ck..
> It’s very disputable whether BEVs are industry’s future
The same cannot be said for batteries and electric motors. We are still quite far from technological limits for the platform. It doesn't seem disputable at all that a platform that can still evolve and improve with significant room for growth will eventually overtake one that has peaked.
Will it? Oil price will reach an equilibrium because lower demand due to electrification will lead to lower prices, which will increase higher consumption.
There are enough low cost oil producers like Saudi Arabia to keep the pipes filled with oil at whatever the prevailing market price is.
What makes you say that? Jet engine manufacturers are constantly making improvements, and one of the biggest recent breakthroughs has been around using proprietary alloys in the construction of some parts to make them lighter and able to operate at hotter temperatures, thus increasing efficiency. I'm not working on any engines, but from a layman's perspective I don't see why there couldn't be material science improvements made to combustion engines.
Edit: clarity
It is not disputable (unless you're including Old Auto lobbyists I suppose). Without government imposed restrictions keeping the public from buying Chinese BEVs without an outrageous markup (or at all) the ICE industry would already be imploding. The government could and should require that all vehicles be under full control of their owners with no remote telematics required, or even allowed necessarily (and heavily restricted even then). That'd resolve concerns about Chinese kill switches or gathering intel data or whatever. But of course the Western industry hates that too because they want to fully enshittify cars next and turn them into locked-in subscription revenue and advertising data sources. So they can't even compete on trustworthiness. Total embarrassment and also long term ruin.
The present gas price mess and global instability Trump has kicked off is just going to draw an even bigger line under both the personal and the national security value of not being tied to any single source of energy for mechanized transportation. BEVs are simply fundamentally superior particularly in a risky world.
Gee I wonder where they got the ideas from
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.
The resulting situation here was that she was constantly bullied into underperforming. Both cases are actually similar in that each individual has a personal incentive to underperform - the difference is that in your friend's case the policy is granted at the company level so no single employee can defect and break it for the rest, while in my daughter's case one high scorer could invalidate the reassessment for everyone, which is exactly what made defection punishable and the bullying emerge naturally.
By the way, it's not 60% of the salary that the state pays - it's 60% of the difference in salary due to reduced hours.
That may work if you are a sole proprietor or small business person, but that's not how shareholder owned corporations work.
A sole proprietor is willing to work more if business drops (effectively lowering their compensation rate) because they are the beneficiary of any future gains that may (or may not) result from their short term sacrifice. If they want their employees to do the same they have to give them the same deal.
A large corporation can't easily make its employees work much longer for the same pay (except in the very short term), nor can it easily get shareholders to be OK with increasing spending on labor. This usually ends with massive layoffs when it can't sustain itself anymore.
That's one reason that smaller companies can be more nimble.
Germany was ahead in EVs and solar - both industries have been cuto off by conservative/free-market ICE lobbysts and these 2 huge global markets are now dominated by China instead.
2000: ~54,600 (happy)
2007: ~98,600 (happy)
2019: ~280,800
2025: 280,000 (CRISIS!!!)
Both China and the US have enacted trade barriers against EU originated auto drive goods.
A Chinese VW ID4 is manufactured in Shanghai and an American one in Tennessee. And that is the crux of the issue - consumers are still open to buying a German badged product, but it won't be "Made in Germany".
And where else can Germany export?
The individual EU states are protective about exports by leaning hard on nationalism and union support as seen in France (Renault+Stellantis) and Italy (Stellantis), India demands China- and US-style JVs and domestic manufacturing as well even despite the EU FTA, Japan and SK prefer buying domestic, Russia is blocked due to sanctions, ASEAN+Africa is flooded with Chinese, Japanese, and Indian manufactured cars already, and South American is flooded with Chinese, American, Japanese or domestically manufactured cars.
Germany Inc will remain in Germany as long as Germany makes itself attractive. Otherwise, they will leave, as they have already done so for the US, China, the CEE, and increasingly India.
Essentially companies get some of the money back they and their employees paid as taxes.
The intention of Kurzarbeitergeld is to prevent large layoffs. I honestly can't tell if that makes sense in the long run, but it seems reasonable for a political party trying to make it to the next term.
This is FUD. They said the same about the Greeks in 2008, it is complete BS. In any given org, passed a certain size you'll find ppl who slack a lot and people who work for three. Unfortunately that seems to the nature of large orgs, nothing special about Germans...
ps. I'm having a DejaVu. This is the exact same narrative Greek politicians used against the Greek population to justify them become poor overnight.
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.
That being said just like Germany they're largely export-oriented and if local demand ever weakens, they'll struggle all the same.
My favorite example of this delusion is Porsche who somehow thought that selling their bread-and-butter model Macan exclusively as an EV was a good idea. I still cannot understand how they arrived at this decision.
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 EU could have also enforced the JCPOA as one of it's guaranteers but decided to be inward facing instead of treating the 2014 invasion of Ukraine as the wake up call that it should have been.
We have been saying for almost 20 years that we in the US are shifting East, but Western and Northern European states like Germany did nothing to prepare for such a world.
At least the French establish military bases, conduct coups, and attempt to project hard power abroad in order to protect their interests.
That would have helped us to reduce co2, but not to get independent from Russia.
Also: Natural gas is used heavily in chemistry and the steel industry, electricity alone does not help, although I admit not raising the point in the previous comment.
> Natural gas is used heavily in chemistry and the steel industry
Absolutely, and Germany could have defended it's ability to access NatGas from outside Russia or the MidEast if they collaborated like France's TotalEnergie and their Indian JV partners did when expanding capacity in Mozambique and Angola.
---
The reality is German politicians are a reflection of the German people (as you guys are fond of telling us Americans).
Germans would gladly choose vassalage instead of restarting and expanding conscription, investing in industrial subsidizes, and adopting a hard power foreign policy strategy.
Merz only started these kinds of policies in mid-late 2025, and while it is a good start, it is too little too late.
Germany used to have one of the most respected armed forces in NATO and was the linchpin of the Yugoslav Wars, but German voters decided to whittle away that legacy.
Is this about JCPOA or the 2014 occupation of Crimea?
JCPOA was being enforced by its EU members, but when the US pulled out, it fell apart. EU based companies couldn't continue to take part of the lessened restrictions because of the fear of direct US sanctions on them, which made Iran mostly uninterested in continuing its participation. It was entirely the fault of the US.
(the real lesson here is "make a product that everyone wants")
Edit: well, after some thinking and remembering all the banners for laser cutting and cnc machining in nearby areas (touristic region at that), there might be some truth to it.
But there is nothing to invest into anymore, France's industry is dead (partly because of Germany with the Hartz agreement btw, lowering demand for italian or french goods which were already less competitive than german ones on export and domestic market because of the euro) and if they didn't care to put capital on automation when wages were high, why would they do it when work becomes cheap?
Novo Nordisk's sales numbers of 300bln DKK (~$46bln) amount to around 10% of Denmark's GDP.
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.
It doesn't sound excessive that there would be two teams using a Jenkins pipeline that would need to be consulted.
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).
上九："亢龙有悔" — The arrogant dragon will have cause to repent. Honestly, what you described — people around you hating EVs, hating renewables, hating cables — that's exactly this. This arrogance always leads to regret.
用九："见群龙无首，吉" — A flight of dragons with no single head brings good fortune. China catching up isn't zero-sum — it's 群龙无首 in action. Multiple strong players competing drive knitting machines from 60k to 20k at equal quality. No monopolist — the consumer, the market, humanity wins. That's literally what the I Ching calls "good fortune."
天行健，君子以自强不息 — Heaven moves with relentless power; so must we strengthen ourselves ceaselessly. The answer isn't protectionism or nostalgia. It's joining the flight of dragons.
Competition, when no single dragon monopolizes the sky, brings fortune for all.
Curious about the I Ching and want to know more? Visit https://ichingdao.love/i_ching/hexagrams/01 ^_^
They have been "catching up" for the past 20 years.
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).
> [..] 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.
Pensions, patent/IP law, land ownership crowding out affordability...
Birth rate drops dramatically
Shocked pikachu face
Also, there are many industries still flourishing across the EU. Airbus, Renault, Zeiss, ASML, ThyssenKrupp, Saint-Gobain, Nestle, Siemens, Sanofi, IKEA, Inditex, Schneider Electric, etc etc etc.
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.
The state of the german IT sector also shows that.
Most startups have nearly no moat at all and purely live off marketing with some sprinkles of corporate identity.
I'm saying that the number of good software offerings is too low, to have a significant impact on the country's economy.
One of the advantages Germany had though, was a somewhat good and accessible higher education system in regards of computer science.
Now, with software development becoming a commodity, this advantage vanishes.
Latest example (I am electrical engineer AND electrician): from this year on my buddy heating system specialist can’t help me with photovoltaic system installation on the roof. Last year he was qualified, this year not anymore. He can however install air conditioning unit on the roof this year too. But not the solar panels… Every year some shady lobby group writes some special law crippling last pieces of working system.
There should be some deregulation and centralization institution in Germany with a real short time efficiency increase plan. Otherwise it will stay there as a country of Oktoberfest and Cologne Carnival.
Lots of real problems listed, but such a non-sequitur conclusion. US is built on these principles, China seems to be more individualistic and consumerist than Germany too. If anything, a big problem in Germany is low ambition as the societal norm. A bit of consumerism could actually help with that, as to consume you need to earn, and to earn, you need some ambition.
And it's a complete clown show rewarding moral bankruptcy that ended up fabricating and promoting uneducated degenerates such as Trump, Hegseth, Miller, &co to the highest positions.
Thanks for making my point really...
Bitter german winters would make living in trailers miserable
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 "
> China’s answer to anything is ship it tomorrow and figure out the rest next week
Yes, god knows we'd never see the Chinese delivering 5 year strategic plans, and they're notably committee-averse.
A large part of China's success is they've been intentional about what they're doing - they've _had_ a strategy, whereas every time we consider that in the West, we're told that's a loser's bet and we need to just let the market do its thing.
It’s not like any of this is news. My newspaper of choice has been telling me about how fast china moves, in vivid detail, since at least 2018 - others probably knew much earlier than I did. I watched a graphic documentary on YouTube about Shenzhen in 2019 that gave me all of the same information in this tweet, minus the accomplishments that have happened since then.
My own eyes have seen how their consumer goods have transformed in a very short time. Maybe other Americans don’t notice because the key categories (tech, cars) have so much protectionism. I’m not sure about the Europeans.
The west is better at coming up with excuses and red tape than actually solving problems, it seems.
> The west is better at coming up with excuses and red tape than actually solving problems, it seems.
Most of the west still has this paterno-colonialist view of the world, we're too complacent, too sure of ourselves, it never changed, just look at how Trump talks about Iran, he is completely clueless about the history of this region of the world, they'd nuke themselves before accepting the unconditional surrender he asked for... It was the same with China: "let's move all our industries there, they are too dumb to figure anything out and they'll will be our cheap labor forever", well no, they're just as smart as us and as soon as they reached the threshold necessary to provide education to the mass they also reached our technological level.
It mostly is over for the west as we know it, demographically, politically, industrially, soon militarily, people who don't see it are straight up blind or historically illiterate, we're in a end of the Portuguese or British empire situation.
To me it's a bit more complicated than that. Unconditional surrender can be achieved ... with boots on the ground all over Iran on a penetration level last seen in WW2. If you think Iran's government is as simple to decapitate as Iraq, think again.
Then you get the unconditional surrender of a government. Is the average Iranian amenable to tolerate this situation and get its terms dictated by the US? Nope, they're not the Germans in '45. You'll get decades of insurgency; if you think ISIS as a consequence of the Iraq Invasion was bad, look forward to even worse.
At the end of the day, Trump always chickens out. Look forward to the end of the American bombings the second the new leader gets him on the phone. The Israelis that's another thing.
I find it difficult to take statements like this seriously.
China has built an incredibly dense manufacturing zone. They've done so by manufacturing more cheaply than other countries do, a key element of which is paying workers less than any European country would be able to do. The rest of what's being described is just what falls into place once you've created that dense, cheap in demand manufacturing zone.
So I would just ignore that whole comment.
What you said is the truth.
Cheap, efficient, fast manufacturing process. I am a software dev, I happen to have worked with Chinese software APIs related to manufacturing and logictics. Move fast and ship broken stuff on monday, and forget to fix it - that is the reality, but somehow people expect they maintain some level of quality now.
Just try working with products like TikTok, their APIs and documentation, the endless headache you will get will show you how they do itterate, but quality is still only barely a factor.
Not true. Manufacturing labor costs are higher in China than in Eastern Europe. For electronics industry I mean, not sweatshops for clothes and sneakers and aliexpress knicknacks. China stopped being the place to go for cheap labor a while ago. You go there for the expertise.
But the simplest explanation is just basic economics and nothing else (growth being fueled by cost difference, mostly from cheap labor, and to a far smaller extend network effects).
I predict Chinese growth slowing down exactly the same way other countries did as wage gaps get smaller.
I assume salaries have gone up soon since, but even if they stagnated, what's the entry-level pay for unskilled factory work in Germany? Just to be sure it's more than 21k.
The likes of Huawei pay their engineers six figure salaries plus tonnes of perks. You're crazy if you think skilled Chinese engineers make only 15% of those in Germany. All their engineers would emigrate abroad if that were the case and they wouldn't be making domestic CPUs and AI accelerators.
Maybe, though nationalism may play a role here, especially if they believe themselves to be the underdogs. Not everybody only optimizes for money.
Net income?
>looks insanely redundant from the outside until you realize redundancy is actually information density in disguise
Everyone knows redundancy costs money today in exchange for security tomorrow. Presumably, Chinese executives are earning more by keeping redundancy, whereas executives in Europe and the US earn more by removing redundancy.
How does China incentivize its executives to spend money on redundancy? I have to imagine it's some type of top down system that fights against personal interests to advance the interests of the tribe (obviously at the expense of personal liberties).
There is a large number of competing and overlapping suppliers because they're all competing for business and none have gained market dominance.
The US and most of the west is largely in a post-capitalistic market, where competition is no longer necessary because monopoly/duopoly status has been reached and segment leaders can simply use their capital to prevent challengers instead of competing on product/service quality, and margins can be widened and quality can decrease because there's no other option.
To me, it seems the solution is to make it possible again for smaller more agile players to compete against bloated and stagnating established companies. The large legacy companies are preventing innovation to protect their domain instead of innovating to keep up.
This is done through regulations. If you are the market leader, you have the resources to comply with new bureaucracy (that you lobby for through standards organisations) and you don't really want to do much risky new development so ossifying your product is fine. That makes it really hard for new competitors to enter the sector.
And outside automotive there's plenty of leaders that don't dominate based on regulations. Google search doesn't dominate based on regulations. Spotify doesn't dominate because they enshrined themselves in copyright law.
Whose income? The automotive engineers being mass layoffed?
In my view much of the ‘corruption’ in the west takes the form of very legal financialization, this massively rewards consolidation as the high debt to equity ratios means low interest rates are paramount and combining two entities allows one to act as insurance for the other lowering the risk component of the interest rate allowing the entity to out compete the remaining entities. Once reaching a certain size the company becomes too big to fail and the risk component merges with the US government. Since the US government is very receptive to donations these companies are in effect able to form an oligarchy. Compare this to China where companies are subordinate to the politicians.
I think the West overestimates the deleterious effects of corruption of our competitors and underestimates our own systemic (and legalized) corruption.
I work in VC and make early stage investments primarily into industrial or other physical industries. It often feels like an uphill battle trying to get people to take interest in this stuff.
My most recent company sources from China because the US infrastructure can’t supply what we need. This is a company that will be worth billions when it scales up and the US literally cannot supply it because our factories are so ancient.
The transition of my country from a socialist to a western capitalist system included a mass closure of heavy industry and what remains is dying a slow death of high energy costs. I remember when a coal mine closed there were all those marvelous ideas how the area would transition to high tech programming jobs; the thing that actually saved the area was a fuse manufacturing plant.
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.
Even if we lived in an alternate timeline where the US was completely supportive of the 2022 invasion at the time, Germany would still be surrounded on all sides by countries with a vested interest in pointing nuclear deterrents at Moscow and lose their energy feed in the same way.
OP's comment doesn't state that. It refers to the US forcing Germany to stop Nord Stream.
That's quite the reversal of facts. Germany cut off Russian gas after imperial Russia started a full invasion on Ukraine. That was Germany's decision and has little to do with the US. The US also did not force Russia to invade Ukraine and to targeted kill Ukrainian civilians for their decision to strive for freedom, democracy and prosperity rather than being a corrupt satellite state to Putin's terror.
Energy prices undoubtedly skyrocketed after that, but that's just the immediate result of finally breaking with the politically engineered dependence on Russia. For decades Germany made itself reliant on Russian gas. What might have started as optimism after the cold war and the hope for good mutually beneficial relations with Russia turned into corruption and irresponsible ignorance and short term thinking at best.
Energy prices in Germany are so high because the German government deliberately sabotaged the shift to renewables. German politics made Germany dependent on fossil fuels that you can burn exactly once and that Germany has to continuously, expensively dig out of the ground and keep importing because Germany lacks enough natural gas. Digging something out of the ground to burn it once is not economic when the alternative of harvesting the sun and wind that just keep on giving you energy indefinitely exists. But Germany decided to deliberately stall building grid technology and farms for harvesting free unlimited energy. Instead they turned to Russia to get gas for cheapish in the exchange for letting Putin live out his imperialist plans. Russia's aggression is not new. They invaded Georgia in 2008 and started the war against Ukraine in 2014. Germany started building the Nordstream 2 gas pipeline, which would have even furthered its dependence, in 2015, after all that. And they kept the plan when Russia backed Assad and commited war crimes against the Syrian people.
"Daddy, look, another stinky gas car!"
The kids already know it.