Germany has never been only a nation of poets and thinkers. It has above all been a nation of engineers. Few sectors embodied that claim as visibly as the automobile industry. “Made in Germany” stood for precision, reliability, craftsmanship and for decades conferred foreign-policy weight on the Federal Republic. That very foundation is now under pressure. Not by chance, but by design: China’s industrial policy offensive is targeting a sector with maximum leverage. In the logic of great competitors, that is no scandal, but to be expected.
Why Germany in particular? Because the automobile is a hub of European value creation. Hundreds of thousands of jobs in Germany, supplier networks from the Czech Republic to northern Italy, tax revenues for municipalities and states, export surpluses that open fiscal and social policy room to maneuver. Whoever shifts market share here, shifts power. There is also a symbolic dimension that should not be underestimated. German brands are more than products. They are anchors of trust in “European industrial competence.” If Chinese manufacturers manage to displace these icons or overtake them technologically, it affects not just balance sheets but the self-understanding of an entire region. In short: anyone who weakens Germany industrially weakens Europe’s political backbone.
Beijing is pursuing three closely interlinked goals. First: setting standards on batteries, software stacks, charging infrastructure, and data architectures. Whoever defines interfaces collects licensing income, amasses data, and writes the rules for future ecosystems. Second: creating dependencies via raw materials, refining, cells, components, and platforms that European manufacturers need to remain deliverable. Third: opening spheres of influence entangling economic ties so deeply that Europe acts more cautiously in foreign and trade policy when China’s core interests are at stake. This is classic power projection by economic means. China’s pushed “green transition” serves as a lever. It does not market the shift to e-mobility and green energy selflessly. Emissions reductions are legitimate and necessary, but this path simultaneously reinforces precisely those segments where the country’s industrial architecture has built structural advantages: battery raw materials and cells, power electronics, propulsion software, charging hardware, and scalable manufacturing. Already, more than half of the battery cells installed by German manufacturers come from Chinese production.
Not least, it was the European Union that initially sought to set global standards and protect its internal market through rules with an ambitious climate and industrial policy. From CO2 fleet limits to taxonomy and a carbon border adjustment mechanism. Yet while Brussels repeatedly negotiated and over-regulated, Beijing invested across the entire value chain and scaled up. The result: many European requirements are now met fastest and cheapest by Chinese suppliers, giving them real market advantages. While buyers in Europe and the United States feel good because battery-powered vehicles ostensibly help the climate, China is simultaneously accruing geopolitical dividends. The power to set standards, control over data interfaces, and supply-chain dependencies. Climate policy and industrial policy converge here by design. This plan did not begin by accident, but with a deliberate geopolitical calculus. As early as 2015, the Chinese government set out “Made in China 2025,” an industrial agenda that goes far beyond modernization. The aim was to challenge Western technological dominance in the key industries of the future. From robotics and semiconductors to aviation and electromobility.
For Berlin, the implications go far beyond location policy. If the profitability of Germany’s lead sector erodes, fiscal space contracts with consequences for infrastructure, education, research, and social policy. In foreign policy, the Federal Republic loses credibility if it cedes industrial sovereignty. Those who talk of “strategic autonomy” yet must import batteries, software, and materials negotiate on soft ground. Security-wise, the attack surface grows: export controls on inputs, deliberate slow-rolling of supply chains, data-policy levers. All of this can become pressure points in a crisis. Domestically, social tensions threaten in regions shaped by the auto sector, and these can quickly spill over into Europe’s supplier regions.
For the EU, what is at stake is the coherence of its economic area. The automobile industry is, in effect, a continental industry. Engines from Bavaria, transmissions from Austria, wiring harnesses from Eastern Europe, design from Italy, and final assembly in several member states. Erosion in Germany weakens this entire architecture. And a Europe that loses its industrial keystones becomes more cautious in foreign policy. Not out of conviction, but out of necessity. The risk is a quiet shift from shaper to object of global rivalry.
Is this “unfair competition”? No. Beijing is doing what other states did in earlier phases of development: decisive industrial policy that bundles raw-material security, technology building, finance, and market access. The difference from previous decades lies in the density, speed, and the depth with which supply chains have been integrated from the mine to the app. That is precisely what makes the challenge geopolitically explosive. China is also converting this success into soft power, sending a message to the Global South. Progress no longer requires the West. Rather, the West requires China.
In the end, the geopolitical core remains: China is not pressuring Germany’s automobile industry out of antipathy, but calibrating power through a sector that undergirds Europe’s economic and political stability. If this grip succeeds, the balance of power shifts durably. Less fiscal strength and less technological authority mean less room for maneuver for Berlin and Brussels. If the European community treats this as a strategic task and not an administrative one it will remain an actor. If not, Beijing will soon set the direction. Because in the end, this is not about cars. It is about power. If China attains industrial primacy in Europe, the balance of forces will shift. Germany – once the workshop and economic locomotive of the continent – would become a sales market for a new order, and the EU a stage for a geopolitical lesson: Without rationality, every vision ends in a dead end.