How Legacy Car Firms are Slowing the EV Transition

A new survey of German car industry managers suggests the sector is further into its electric vehicle transition than public debate tends to imply, with a small group of slower-moving firms distorting the wider picture and potentially dragging down the broader shift. The research was carried out jointly by the University of Sussex and the Fraunhofer Institute for Systems and Innovation Research, drawing on responses from 74 industry managers gathered toward the end of 2025. 

Sixty-one percent of the companies surveyed were moving quickly toward electrification, while the remaining 39% were classified as slow transformers. Just one in eight had yet to make any move in that direction. Reversing phase-out policies would penalize the very manufacturers with the strongest footing in the global clean technology race, the report warned, and managers reported little confidence that governments are committed to backing the shift. 

Cutting emissions from road transport is one of the thorniest challenges in Germany’s broader energy transition, with millions of combustion engine vehicles still in circulation. How Germany keeps its car industry globally competitive through the clean technology shift is seen as key to its broader net-zero ambitions. Recent government policy has sent conflicting signals on both fronts. 

Earlier this year the government brought back EV subsidies, but also lobbied the EU to water down the 2035 deadline banning new combustion engine car sales. Tax relief on petrol and diesel was also introduced, partly in response to the fuel price spike from the U.S.-Israeli strikes on Iran. Critics see the moves as undermining the clean transition. 

No formal decision to dilute the 2035 phase-out has yet been taken at EU level, and the report argues firmly against any such move. Researchers warned that repeatedly amending or reversing course leaves manufacturers unable to plan with confidence and fractures coordination across the wider automotive ecosystem. 

They describe the 2035 target as the structural anchor of the industry’s transformation, giving manufacturers the long-term certainty investment requires. 

Project coordinator Karoline Rogge said Germany risks making policy for its weakest performers while ignoring manufacturers that have already placed major bets on electrification. Those same firms, she added, hold the best chance of putting Germany back among global clean technology leaders. 

The survey also found that sharp spending cuts during the previous administration’s budget crisis had shaken confidence in the government’s commitment. That left many firms reluctant to invest further. 

Rogge said every time policy reverses course it chips away at both planning certainty and Germany’s standing as an innovator in emerging technologies. She concluded that without sustained political commitment, the industry’s electric transition risks stalling altogether. 

Firms like Ferrari N.V. (NYSE: RACE) that have laid out ambitious EV plans will be looking at policy stability in the EU as a key determinant of how quickly they execute their plans over the coming years. 

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