Strasbourg, 8 July 2026 — EBM Newsdesk Analysis — By Nick Staunton
Stéphane Séjourné, the European Commissioner for Industrial Strategy, told the European Parliament on 7 July that Europe’s car industry faces an “existential crisis” with millions of jobs at risk. The warning came as Porsche prepared to cut a further 4,000 jobs and Volkswagen’s board weighed a plan that could remove around 100,000 roles. The striking part is what Séjourné did not say. He listed Chinese competition, tariffs and broken supply chains as separate problems. In truth they are one problem, and Europe’s own policies helped create it.
The car industry is not a normal sector for Europe. It supported around 13.8 million jobs in 2019, roughly one in sixteen workers in the bloc, and more than 7% of its economic output. When an industry that large starts to shrink, the damage does not stay inside the factory gates. It reaches the suppliers, the towns built around the plants, and eventually the public finances of whole countries. That is what is now happening, and it is happening on several fronts at once.
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SubscribeThe numbers are already grim
This is not a warning about the future; the cuts have been running for two years. Germany has lost around 125,000 automotive jobs since 2019. In France, employment has fallen by roughly a third since 2010, from about 425,000 workers to fewer than 290,000. The parts makers who supply the big carmakers are being hit hardest of all. Their trade body, CLEPA, says the supply chain lost more than 100,000 jobs in just two years, while creating only 7,000 new ones. Its secretary general put it plainly: 140 families are affected every single day.
The list of individual company cuts reads like a roll call. Mercedes is removing up to 30,000 jobs and chasing €5 billion in savings. BMW plans to cut around 5% of its workforce. Bosch and ZF, two of the largest suppliers in the world, have both announced heavy layoffs. Volkswagen has already closed its first-ever German plant and agreed 50,000 job cuts with unions. Its board is now considering going much further, and Germany’s own car lobby has told Bloomberg that more plant closures are inevitable.
Why it is all happening at once
The reason so much is breaking together is that European carmakers are being squeezed from three directions.
The first is China. Brands like BYD, Chery and Geely now build electric cars that are cheaper and, in software terms, often better than European models. They have taken share inside China, where German brands used to dominate, and are now doing the same in Europe. Chinese models passed 10% of EU car sales for the first time in May.
The second is the failed bet on electric cars. European makers spent enormous sums preparing for a fast switch to electric that buyers did not deliver. When demand fell short, the write-downs were brutal. Stellantis alone wrote off €22 billion, one of the largest such charges in the history of the industry. Factories retooled for electric production are now running well below the level at which they make money.
The third is cost. European energy and labour are expensive, and years of high inflation have made new cars dearer while making buyers poorer.
The trap Brussels built for itself
Here is the part that should trouble policymakers most. Europe’s own response has made the problem worse.
In 2024 Brussels put tariffs of up to 35% on Chinese electric cars, hoping to buy European makers time. The tariffs did not slow the Chinese down. They changed where the Chinese build. A car made in China faces the tariff; a car made inside the EU does not. So Chinese firms started building inside Europe.
The results are already on the ground. Chinese carmakers are in talks to take over the very factories European firms cannot fill. BYD is opening plants in Hungary and Turkey; SAIC has chosen Spain. Most striking of all, Stellantis is using cheap Chinese models as weapons against its own rivals, selling a Chinese-designed car built in Spain that undercuts the Volkswagen ID.3 by around €10,000.
So the tariff wall did not keep Chinese industry out. It invited Chinese industry in, on Chinese terms. The jobs it was meant to protect are going anyway. The only thing that has changed is who owns the factories where the surviving jobs remain.
What Brussels is trying now
The Commission knows the old approach failed. Its answer is a new Industrial Acceleration Act, designed to favour European-made goods and to screen foreign investment more tightly. But the draft has had the opposite of its intended effect so far: it has made Chinese firms move faster, rushing to lock in European sites before the rules take hold.
What the jobs figure really means
Séjourné’s “millions of jobs” is not scaremongering. The industry directly employs about 2.4 million people making vehicles, and supports around 13 million once suppliers and dependent businesses are counted. The exposure is uneven. Germany and France have the most to lose in absolute terms. But the Czech Republic, Slovakia and Hungary are even more dependent, because so much of their industry is foreign-owned assembly work that can be moved.
That is the real danger. It is not only that Europe loses jobs. It is that it loses control of an industry it built, and grows dependent on imported cars, batteries and technology it no longer makes. As EBM has argued, this is not a passing trade imbalance but a structural displacement of European industry. The car industry is where that argument stops being abstract and starts being counted in factory towns.
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