Everything is going badly in Germany at the moment.
The country is going all-in on electrification, but the cornerstone of its industry – car manufacturing – appears to have missed the mark when it comes to building electric cars. Meanwhile, the country is emptying its industrial base more broadly and finds itself stuck in a doomsday loop of austerity.
The chemical industry and large electricity consumers are dead or dying because of the war in Ukraine and high energy prices.
Now China is putting them under pressure when it comes to electric cars. China is now on track to become the world’s leading exporter of automobiles, after a dizzying rise from almost zero. no later than 2020.
This is one of the most impressive charts in economic history:
What is left for Germany? It’s not about construction, here’s a graph showing the increase in project cancellations and the drop in orders:
The situation in Germany is terribly worrying and two weeks ago German politicians rejected energy subsidies, which the Minister of Economy said would be a death sentence for the industry.
The German economy is expected to contract slightly this year and, given the headwinds, it’s a miracle it’s not worse. In 2024, Germany will face the threat of fiscal tightening as well as the vagaries of natural gas prices.
Pray for a warm winter.