WionDrive News Desk 
German Chancellor Olaf Scholz has strongly defended the nation’s automotive industry against concerns over Chinese competition while inaugurating Mercedes-Benz’s pioneering battery recycling facility in southwestern Germany. The Chancellor’s remarks come amid growing tensions between the European Union and China over electric vehicle (EV) trade policies.
Speaking at the opening ceremony in Kuppenheim on Monday, Scholz directly addressed industry fears about Chinese technological advantages in electric vehicle production. “Some say that China can do much better with electric motors than us,” the Chancellor acknowledged before asserting, “German companies need not be afraid of this competition.”
The Chancellor’s confidence stems from the German auto industry’s historical resilience, particularly its successful navigation of intense competition from Asian manufacturers. “Our automotive sector has previously weathered strong competition from South Korea and Japan,” Scholz reminded the audience while reiterating Germany’s opposition to the European Union’s protectionist measures against Chinese-made EVs.
Taking a firm stance against trade barriers, Scholz declared, “I’m against tariffs that harm us.” However, he did qualify his position, suggesting that such measures might be appropriate in specific cases where dumping and subsidies create unfair advantages for foreign producers, citing the steel industry as an example where protective measures could be justified.
The Chancellor’s comments come at a crucial time for the European automotive sector, which faces multiple challenges. These include escalating production costs, the complex transition to electric vehicles, declining consumer demand, and intensifying global competition. These pressures have already forced some European manufacturers to reduce their production capacity, with industry leader Volkswagen reportedly considering unprecedented plant closures in Germany.
Mercedes-Benz, however, presents a more optimistic picture. According to Joerg Burzer, the company’s board member responsible for production, most Mercedes plants are operating at full capacity. The only exception is the Sindelfingen facility in Germany, which produces the luxury S-Class model line. This facility has experienced reduced demand, particularly affected by the recent downturn in Chinese luxury car sales.
The company’s performance in China, where it generates approximately one-third of its sales, has shown signs of strain. Third-quarter sales in the region dropped by 13%, primarily due to decreased luxury vehicle demand linked to China’s ongoing real estate crisis, which has particularly impacted sales of the premium S-Class models.
The inauguration of the new battery recycling plant represents a significant step forward in Mercedes-Benz’s sustainability initiatives. The carbon-emissions-free facility will focus on extracting valuable raw materials such as lithium, nickel, and cobalt from used electric vehicle batteries, creating a circular economy approach to EV component manufacturing.
The facility’s opening comes against the backdrop of escalating trade tensions between the EU and China. The European Union has implemented substantial tariffs on Chinese-made EVs, citing unfair state subsidies as justification. Beijing has strongly denied these allegations and threatened retaliatory measures. German automakers, who derive approximately one-third of their profits from the Chinese market, have expressed concern about these developments and advocated for increased dialogue between the parties. Notably, Germany voted against the implementation of these tariffs, highlighting the complex balance between protecting domestic industries and maintaining crucial international trade relationships.
