Discussion

The engine of Germany's wealth is blocking its future

paganel: This [1] is what really brought Germany's industry down, not the green non-sense spouted by articles like this one:> Gas prices rose to $70 per megawatt-hour in Germany — it makes it 6 times more expensive than in the USGermany was relatively fine, industrially speaking, while it still had a working relation with Russia and especially with cheap Russian gas. It all went to the gutters for them 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

joe_mamba: I found a very detailed and well argumented opinion piece on X that struck really hard on this topic: https://x.com/BetterCallMedhi/status/2027625247068065864Here'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 shockmy 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 arrivewhen 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 & costwhat 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 disguiseI 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 dailythe 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 internallyso 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 enginethe gap is ARCHITECTURALit’s ecosystem density, you need a custom connector in Shenzhen you walk 200 meters, in Munich you send an email and wait 3 weeksit’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 nowBYD 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 committeeI 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 oneEurope & 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 fasterEurope’s answer to China is always a committee, a regulation, a 5 year strategic plan and a press conferenceChina’s answer to anything is ship it tomorrow and figure out the rest next weekone 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 "

afavour: > China accidentally built a distributed neural network of manufacturing intelligence where knowledge diffuses horizontally across thousands of agentsI find it difficult to take things 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.

joe_mamba: > a key element of which is paying workers less than any European country would be able to doBS, manufacturing labor is now cheaper in eastern European than in China.

treis: This is more like inefficiency in sheeps clothing. Being able to iterate that quickly and cheaply relies on spare capacity and people making salaries 10-25% of what Germans get.

linkregister: This is an excellent analysis of the issue.

lotsofpulp: >Europe & America are optimizing variables that China stopped tracking years agoNet income?>looks insanely redundant from the outside until you realize redundancy is actually information density in disguiseEveryone 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).

joe_mamba: >Net income?Whose income? The automotive engineers being mass layoffed?

madaxe_again: Perfect regulatory capture is like putting a toddler in charge of your household - corporate organisms, like toddlers, do not know what is good for them, and are not willing to accept short term pain for long term gain.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.

pc86: Unions don't exist to protect the industry or maximize industrial gain, they exist to get as much as they can for the most senior members of the union (with union leadership being at the top) and proportionally less the less senior you are. By design they are more than happy for individual companies or even large swaths of industry to disappear if it means more spoils for the senior members in the short term.

alephnerd: While Germany should invest in EVs and Green Energy, that alone isn't blocking German economic growth.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 did.Germany's economy was hollowed out because Germany Inc decided to shift capacity to it's two largesr unified markets.[0] - https://oec.world/en/profile/country/deu#trade-balance[1] - https://www.ifo.de/DocDL/EconPol-PolicyReport_41_1.pdf[2] - https://www.cnbc.com/amp/2023/02/14/biden-ira-germany-rules-...

okokwhatever: This is brutal truth

orwin: Not only for electronics, for metallurgy too.

mg: German chancellor Friedrich Merz ... lashed out at German workers to “simply do a little more,” Germany literally pays people to do nothing.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.

maqnius: Depends on where you work in the industry, there's a huge level of division of work. Upstream departments should work more on new products and marketing etc. But a little more downstream, there isn't much todo if not enough cars are ordered.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.

mentalgear: The problem is they don't get rid of their ICE cars any more - most of the world is transitioning to EVs and China - their previously biggest importer - has strict EV quotas and no one wants to buy German EVs that are too expensive and less capable than Chinese made EVs.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.

alephnerd: 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.

ahartmetz: It makes sense for production line workers. Less so for R&D, but I've seen it affect R&D as well.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.

orwin: 8 years ago, a new unskilled factory worker in china made the equivalent of 700-800€ hourly, with free food and accommodation (this cause issues in rural areas but this isn't the subject).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.

oytis: Depends on your position I guess. If you are a worker at a conveyor belt, it doesn't make sense to work more to produce more cars nobody needs. I think originally this policy was designed to save jobs during temporary downturns, not to save industries going downhill

dinkblam: everything in germany's economy is going downhill, the troubles in their car industry is just one symptom (but not the cause)

ahartmetz: Where did you get that opinion? Germany is not doing great but OK in the group of Western countries, and its car industry is both very imporant and in trouble, so it's not an unreasonable opinion that things would be better without that trouble.

tw-20260303-001: It's not. It's more like a cancer patient with an Überweisung for their first cancer screening but dragging their feet to go and do it. They know is it bad and will get worse but they're afraid of facing it.

Suckseh: China took over exports and manufactoring capacity 5 fold of what germany was doing in core industries: manufacturing, machine building and chemicals.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).

cactusplant7374: Copy the model of ASML. Build something really complicated that no one else can easily copy.

mentalgear: Germany’s powerful automotive lobby prioritized short-term dividends and executive bonuses over long-term survival. Instead of investing in EV innovation to future-proof the industry, they leveraged their influence with the conservative (CDU/CSU) and free-market (FDP) government parties to weaken national and EU emission targets.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.

V__: Another big problem is the mentality. "We have always done it this way" and "I don't want to change it" is extremely prevalent. I say this as a German.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.

whiteboardr: I would disagree.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.

whiteboardr: It's not as simple as 100% of this is on the car manufacturers.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.

flakeoil: The fact that Angela Merkel closed down all nuclear power plants was probably a big part of the lower interest in EVs in recent year. Although they invested a lot in solar and wind, the solid base of electricity generation disappeared and thus the trust in electricity for transport disappeared amongst automotive management and the population at large.

rramon: Germany could turn it around with laxer laws about permanent residency and new infrastructure. Allow people to live permanently in mobile homes, vans and caravans which they can rent to won from automobile makers, invest in campsites. The good future imo isn't megacities but distributed cities with families and social circles congregating.

fnord77: [delayed]

d3ckard: It’s very disputable whether BEVs are industry’s future and your entire thesis depends on it to be true.

asymmetric: I'm curious, what do you think the future of the car industry is, then?

kenhwang: It's not redundancy, it's capitalism.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.

pantalaimon: > segment leaders can simply use their capital to prevent challengers instead of competing on product/service qualityThis 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.

roughly: It's also done through acquisitions, anticompetitive practices, exporting externalities, and exploiting consumer information asymmetries.

myrmidon: Looking back, people had the exact same kinds of reactions (regarded as cheap trash => cutting edge) to the Japanese electronics industry 40 years ago, with the eact same takes (overstated rationalizations focussing on process, organization, culture; I could probably find like 20 different books discussing those in excruciating detail in a minute).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.

atmosx: If you look at their stock performance and management compensation the last 25 years, much of the responsibility seems to lie with the manufacturers themselves.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.

mingusrude: I don't think trailer parks is how most people envision the future for a leading European country.

baggachipz: Looks like they're taking a page right out of the USA playbook: Chase quarterly profits at the expense of the future, enrich large investors via stock buybacks, lay off workers, and rely on the government to subsidize the behavior. Probably not the model to emulate, but here we are.

odiroot: > Another big problem is the mentality. "We have always done it this way" and "I don't want to change it" is extremely prevalent. I say this as a German.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.

markus_zhang: I don’t know what the German carmakers are going to do, but I’m wondering if they should put eyes on some Chinese EV carmakers that are going to go defunct — quite usual in Chinese manufacturing philosophy, and buy them cheap. Then they can use the tech to export cars back to EU.

Liftyee: Doesn't necessarily have to be top down. It could be cultural, the quarter-by-quarter market economics incentivises "money today" (just look at all the disasters caused by poor maintenance) but cultural norms of long-term thinking could drive prioritisation of "security tomorrow". Also, a sense of personal duty and honor instead of accumulating money being the sole arbiter of social status.

lotsofpulp: It's popular to say that business in the US operates on a quarter by quarter basis, but I don't see how that can be true when all the most valuable and profitable businesses operate on 5+ year long investment timeline (tech, pharma, real estate, finance).However, even that is clearly not long enough to align incentives with the totality of society, including future members. A high proportion (and ever increasing) of society optimizes for the next 5, 10, maybe 20 years max simply due to their age.

ffsm8: Blaming Merkel of all politicians for that is seriously retarded. Sorry but no other way to phrase it.That's entirely on the green party. They ran on it and Merkel publicly stated she's against it, but will do it for the coalition. Because it was more important to get the coalition done then keep the plants running for another few years (by which they'd be decommissioned anyway)It's typical woke behavior, causing issues and blaming others for the shit they cause. (Not you, but the green partys politicians which occasionally blame her for that,too)

whiteboardr: This is false.The topic was a calculated decision by her and her cabinet, based purely on fear mongering to gain voters.Blaming the green party or even calling this "woke" sounds wrong.

axegon_: I have some experience with the German automotive industry (having worked at a company that is a service provider for much of the German giants), I can instantly confirm a few things, which are known by some and suspected by most: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.

chewz: Agreed. No plans to buy German car anytime soon.

intalentive: Where is Germany going to get the fuel to power an ICE fleet? Where is Germany going to get the electricity to power an EV fleet?Germany faces much bigger problems than the auto lobby.

soco: I somehow have the feelings that you two actually agree quite a lot. Because there are two populations there: one who'd be able and willing to change, and the other busy to protect their own accounts and after me the deluge. It's all which one of these are at the buttons, and I reckon it's the second.

kindkang2024: This reminds me of ䷀ Qian (Heaven), one of the 64 hexagrams from the I Ching — one of the most ancient books from China, written 3000 years ago. I think it speaks directly to this: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 ^_^

nine_k: Not running on Russian gas for a few more years might have some nonlinear effects around 2022 :-/

Spooky23: It's the standard innovators dilemma nonsense, with the added drama of the car case that the innovator (Tesla) shot itself in the foot due to a madman in charge.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.

jandrese: There is another dimension to this. All of the legacy auto manufacturers, without exception, have been dragging their heels on EVs. Lots of people talk about corporate inertia and shareholders and whatnot forcing the companies to be irrational, but I don't think that's entirely correct.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.

pjc50: The VW EVs aren't bad, apart from poor UX design, which they have realized.

atmosx: Broadly speaking they're not _as far away_ from Chinese EVs as we all make it here to be. However, the problem is that the stockholders of all these companies expect 500% YoY growth which isn't sustainable. Not to mention the cost of a car has grown significantly while all German cars have degraded substantially in quality. For example, you can expect Porsche to sell FOREVER the number of cars they manage to sell in the 00s and 10s: 2000: ~54,600 (happy) 2007: ~98,600 (happy) 2019: ~280,800 2025: 280,000 (CRISIS!!!) I mean... It's a freaking sports car! Why on earth would you expect to sell more units than these?

_ink_: Wow, Denmark is leading manufacturing growth and the German government is still telling us that the hourly wage is the problem.

pjc50: That's basically just Novo Nordisk manufacturing Ozempic. Yes, it's big enough to distort all graphs about Denmark.(the real lesson here is "make a product that everyone wants")

tokai: If you look at actual numbers it clear that danish manufacturing is very healthy underneath the NN success.

rokhayakebe: What is the cause?

lm28469: imho there are multiple, starting with the pension and healthcare system which are not sustainable with the current demography trend, which pushed them into going all in with immigration, which fractured whatever was left of german identity (which was arguably already wiped out after ww2 and the cold war). Taxes are going up, retirement age is increasing, pensions are decreasing, public services are getting worse year after year, there is nothing young people can focus on, nothing they can expect to have better than their parents or grand parents, most will never own their place. The self sabotage of the energy sector certainly didn't help. No long term vision + no clear way to improvement + no sense of appartenance = game over, and this is hitting most of the west at once, it's all about individualism and consumption, you can't build societies on these principles.

oytis: > it's all about individualism and consumption, you can't build societies on these principlesLots 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.

lnsru: Tax system and IG Metall salary tables will kill ambition very quickly. The highest salary groups do not guarantee comfy lifestyle for the corresponding areas anymore. Giving away half of salary as mandatory insurance and paying 19% value added tax from the rest is just insulting. Don’t forget the rents in 2026. It’s again new all time high. It does not pay off to work anymore.

jonp888: "the solid base of electricity generation disappeared and thus the trust in electricity for transport disappeared"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. There has been no electricity grid collapse in Germany for decades(in contrast to the US). 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.I have never in my life heard any connect the use of EV power with the power station the charging comes from.

theK: No it is not. Anything combustion related certainly isn't as has been proven ad absurdum. All non BEV non combustion alternatives are, optimistically phrased, in their infancy. So yes, BEVs are the future for the next 20-40 years at a minimum.Edit: clarity

ileonichwiesz: It’s not that much higher, actually. I just looked at some unskilled production line job offers, and looks like they start at 15-18€ per hour. Scale that to full time, and it’s less than 30k€/year - and of course without the free food and accommodation that you mentioned.

basilikum: > 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.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.

sazz: WTF about your understanding of the German power grid, I would say.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?

bix6: Meanwhile our top VCs continue to invest in SaaS, AI (new SaaS), and crypto (ponzi returns) because I guess the only thing that matters is widening the wealth gap and enjoying the yacht life.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.

SirHumphrey: It's also that the west collectively convinced themselves that the economy could be built on high value knowledge work and services and manufacturing will be handled by someone else. Of course people would rather live near some offices, or maybe a workshop than a heavy industrial site...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.

slaw: Isn't it easier to fix housing issue and build more apartments?

rob74: What you call "aid from abroad" is generally called a functioning wide area synchronous grid (https://en.wikipedia.org/wiki/Wide_area_synchronous_grid) which covers most of the EU plus some Balkan states, Moldova, Ukraine, Turkey and the northwestern corner of Africa. So Germany can sell power to others when renewables are generating more than it needs (which is often), and import power, not necessarily because it couldn't produce it, but because importing it can be cheaper than e.g. starting up an additional backup plant. This is nothing special and has been working reliably for decades.

sazz: That's right, Germany sells electricity to other countries during the day and buys electricity in the evening because there is no sun then.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.

adverbly: "The engine of X's wealth is blocking its future" is a pretty common theme these days...Pensions, patent/IP law, land ownership crowding out affordability...Birth rate drops dramaticallyShocked pikachu face

CharlieDigital: > It’s very disputable whether BEVs are industry’s future As a technology, ICE is pretty much close to its peak. It's very hard to imagine significant improvements in ICE as far as efficiency, weight, and power output goes.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.

nine_k: Also, oil will only get more expensive in the long term, and electricity is going to get cheaper, with more and more solar panels generating electricity locally "for free".

nindalf: > oil will only get more expensive in the long termWill 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.

sofixa: > As a technology, ICE is pretty much close to its peak. It's very hard to imagine significant improvements in ICE as far as efficiency, weight, and power output goesWhat 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.

throwaway_20357: How can manufacturers fight EV adoption? If an EV is a superior offering it will find its market. Germans are free to buy Teslas, BYDs or domestiv EVs. There are reasons why the EV market share in Germany was still only 4.1% in 2025 (most likely: high electricity prices, relatively low gasoline price) but manufacturers "fighting adoption" is not one of them.

jhbruhn: Good luck modulating nuclear power plants when there is a lot of cheap renewable energy available.

sazz: ...because you don't have to modulate renewable energy?

patall: Ideally, you have 300% renewable energy available and then modulate actual production based on demand.

AnonymousPlanet: That is a very popular opinion and I've held it too for a very long time. Until I read an issue [1] of The Economist in 2020 and did some digging afterwards.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 industry for 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...

twoodfin: If the platform, power train, manufacturing is commoditized, shouldn’t that in theory be great news for existing brands with consumer trust and design competence?

AnonymousPlanet: That's the current hope. But do you know who also had consumer trust and design competence? Telefunken, AEG, Braun, Grundig, Blaupunkt, Loewe ... How many products of those brands are produced in Europe today, if any? None of them had a mote as deep as the combustion engine.

ramboldio: A very key problem is the common narrative that green policies and the EU allegedly caused the downfall of the car industry (-> "Verbrennerverbot").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.

throwaway_20357: What would the appropriate strategy have been after realizing China had decided to squeeze foreign cars out of the market? The "obsolete business model" still sells many cars world-wide.

CharlieDigital: Your example is from a high-value engine where the switch to proprietary alloys has significant savings in a jet engine.ICE for cars? Do you think the same constraints apply?

throwaway_20357: They are on par or better than their Chinese counterparts but they are a hard sell being 30-50% more expensive.

sofixa: No, but I think if material science improvements can be made in jet engines, there is no reason to think combustion engines for car are "complete" and nothing around them could be improved. They're much less expensive, but at a much larger volume, and they have at least a few decades of future - even if we assume all of the developed world moves to EVs in the next decade or so, which is unrealistic already, there is all of the rest of the world. Most African countries don't have stable power for all of their populations, EVs are simply not going to work there as the main vehicle type. Then add in trucks, where the weight of the batteries makes them impractical for heavy duty long distance trucking. There are improvements, but it will still be many years before they are available, and decades before they've replaced everything already existing.

tokai: Interestingly there was a public discussion in Denmark around 2016, about how the Danish labor market and industry should not end up approaching 'German conditions', even though the Hartz reforms were envied by some economically liberal Danish politicians.

_ink_: Looks like as if it was a good choice to not copy the Hartz reforma.

nkmnz: There's no technical need to do that, because someone who can always deliver electricity would be able to struck contracts with those that always need it, i.e. heavy industry, esp. aluminum and chemistry. The reason why downregulation was necessary in the 2000s and 2010s was regulation ("Einspeisevorrang"), not technology.

menaerus: I agree with some of your points, they make sense, but China has been building combustion engines too, for a very long time which is why I don't think that sidestepping the technology with EV was the main reason for their success

JSR_FDED: This word-for-word applies to the US car industry too. The Europeans would do well to see the current state of US car manufacturers as a cautionary tale.