Everything is going wrong in Germany right now.
The country is all-in on electrification but the cornerstone of its industry — automotive manufacturing — appears to have missed the mark on building electric cars. Meanwhile, the country is hollowing out its industrial base more broadly and is stuck in a doom-loop of austerity.
The chemical industry and heavy-electricity users are dead or dying due to the war in Ukraine and high energy prices.
Now they’re being squeezed by China on electric cars. China is now set to be the world’s top auto exporter in what’s been a staggering rise from nearly nothing as recently as 2020.
This is one of the most-impressive charts in economic history:
What’s left for Germany? It’s not construction, here is a chart showing surging project cancellations and falling orders:
The situation in German is terribly concerning and two weeks ago, German politicians rejected energy subsidies, something the economy minister said would be a death sentence for industry.
The German economy is likely to contract slightly this year and given the headwinds, it’s a miracle it’s not worse. In 2024, Germany faces the threat of a tighter fiscal situation along with the whims of natural gas prices.
Pray for a warm winter.