The engine of Europe’s economy is stalling, and the German car lobby says the EU’s "bureaucratic blindness" is to blame.

The gloves are off in the battle for the soul of Europe’s industrial base. The German Association of the Automotive Industry (VDA) has launched a blistering attack on Brussels, accusing the European Union of being "in denial" about the catastrophic crisis facing the continent’s carmakers. As factories consider closures and investments are slashed, the industry giants warn that the EU’s regulatory obsession is driving the sector off a cliff.

A Regulatory Stranglehold

Hildegard Mueller, the head of the VDA, did not mince words. "All too often, Brussels presents a dangerous mixture of denying reality and illusions about its own relevance," she told reporters in Frankfurt. The crux of the anger lies in the EU’s aggressive 2035 ban on combustion engines and the tightening CO2 targets for 2025. The industry argues these targets are technically feasible but economically suicidal in the current market.

The reality on the ground is grim. Volkswagen is considering closing plants in Germany for the first time in its history. Audi is shuttering its Brussels factory. Demand for electric vehicles (EVs) has flatlined as subsidies dry up, yet the EU continues to mandate a rapid transition. "We are being forced to produce cars that the market is not buying, while Chinese competitors flood the market with subsidized alternatives," a senior industry insider remarked.

• The China Factor: While Europe regulates, China innovates. Brands like BYD are capturing market share with cheaper, high-tech EVs. The VDA argues that the EU’s response—tariffs—is a band-aid on a bullet wound. The real issue is the cost of production and energy in Europe.
• Investment Strike: A survey revealed that nearly three-quarters of German automotive firms are planning to delay or cancel investments in their home market. Capital is fleeing to the US and China, where the industrial policy is supportive rather than punitive.

The End of an Era?

The automotive sector is not just a business; it is the backbone of the European social model, employing nearly 14 million people. If it collapses, the shockwaves will be felt from Wolfsburg to Bratislava. The VDA’s outburst is a desperate plea for a "reality check."

They are demanding a pause on new regulations and a review of the 2035 ban. But Brussels seems unmoved, committed to its Green Deal ideology. The collision course is set. Unless there is a dramatic U-turn in policy, the "Made in Germany" car—a symbol of engineering excellence for a century—may become a relic of the past, regulated out of existence by the very institution meant to protect it.