Ifo Survey: Business Climate in the Automotive Industry Improves in February - Germany's electric vehicle boom drives €40B export surge in 2025

Germany's automotive industry is seeing a revival in early 2026, driven by rising demand for electric vehicles. Domestic automakers have reported fuller order books, while exports to EU neighbours continue to climb. Despite setbacks in major markets like the USA and China, the sector remains optimistic about future growth.

As of January 1, 2026, Germany had over two million registered electric cars—about four percent of all passenger vehicles on its roads. This surge in adoption has helped push global electric vehicle exports to €40 billion in 2025, a 6.5% increase from the previous year.

More than half of these exports went to EU countries, with the Netherlands, Belgium, France, and Denmark leading demand. Meanwhile, non-EU markets like Taiwan, Mexico, and India also saw growth in electric vehicle exports, though specific figures remain unclear.

However, demand in the USA and China weakened in 2025. German electric vehicle exports to the USA fell by 9.4%, while shipments to China dropped by 9.7%. Despite this, business sentiment improved in February, with export expectations rising from 8.5 to 10.8 points. The industry's overall outlook also brightened, as the business climate indicator climbed from -19.1 to -15.6 points.

German automakers are now looking ahead with cautious confidence. Companies expect overseas sales to strengthen in the coming months, supported by the growing popularity of electric vehicles. The shift towards EU markets and emerging economies may help offset losses in the USA and China.