Germany pays the price for climate nonsense

The wheels are literally falling off the automotive industry

Germany’s car makers employ almost 800,000 people, almost 2% of the total workforce of 46 million in the country. But a decade or two of climate silliness (pretending CO2 causes climate change for political gain) and a vain attempt to switch from coal, natural gas and nuclear for electric power simply made the German grid unreliable and the cost of electricity rise to painful levels. Since 2004, electricity in Germany has done nothing but rise in cost and decline in reliability.

Crippled by high labor costs, high energy costs and declining demand for vehicles in general and electric vehicles (EV’s) in particular, German automakers are taking it on the chin. For the first time in over 80 years, Volkswagen is contemplating closing some auto assembly plants. Germans bought a lot of EV’s based on generous incentives from the left wing German government that had gone “all in” on the specious climate change narrative, but when the government decided to end the subsidies reality descended very quickly.

German leaders tried to make a silk purse from a sow’s ear by subsidizing wind and solar, closing coal and nuclear plants, and pretending they could fuel their economy with “renewables” and everyone would drive an EV. All they did for that massive effort was squander billions of taxpayer dollars and cripple German industry.

German automakers are revising their guidance for 2024 and beyond. Mercedes cut its outlook yesterday and the shares fell 7%. BMW cut outlook on September 10, 2024, and suffered a similar reaction. Volkswagen has been ratcheting back sales forecasts since March and now contemplates plant closures. Reality is setting in a colliding with leftist policies, and investors are feeling it. EV sales are falling, profits are elusive, dividend rates are high and likely to be cut if the slump persists, and Germany is leading the way to a full-scale collapse of European manufacturing.

What goes around comes around.