Automotive industry at the forefront of investments

The transformation of the German automotive industry is in full swing, the industry is on the way to a digital, sustainable mobility of the future. In order to advance developments in fields such as autonomous driving, data-driven business models, digitalized and sustainable production and the switch to alternative drives, investments in research and development (R&D) are crucial.

Annually, the European Commission releases its publication "The EU Industrial R&D Investment Scoreboard", in which the world's strongest R&D companies are compared based on their R&D investments as part of a competitive analysis. VDA evaluations of the associated data set in the current edition show that global R&D investments by German automotive companies in 2022 increased by 15% compared to the previous year and amounted to €52.2 billion.

From an international perspective, automobile companies with German headquarters account for 30% of the industry's global R&D investments. In other words: Almost every third euro invested by the automotive industry worldwide in major future issues came from German companies in 2022. At EU level, the expenditures of German manufacturers and suppliers in 2022 even accounted for 72% of the R&D investments made by European automotive companies worldwide.

While Germany remains by far the leader in global investment in automotive research and development, other countries such as the USA, China and India have also significantly increased their commitment in the same year.

The automotive industry is also extremely innovative and strong in research within the German economy. According to the Donors' Association for German Science, the R&D expenses of automobile companies based in Germany amounted to a good €28.7 billion in 2022. This means an increase of 11% compared to the previous year.

The investments made by the automotive industry are also noteworthy compared to other economic sectors in Germany: with a share of 35% of the economic sector's total internal expenditure, it invested more than the next three most important economic sectors: the electrical industry, mechanical engineering and information/communications combined.

With a share of over a third of the German economy's internal R&D expenditure, the automotive industry is an integral part of the German innovation system. Manufacturers of motor vehicles and motor vehicle parts make a significant contribution to the innovative strength and sustainable competitiveness of the German economy.

From 2024 to 2028, manufacturers and suppliers to the German automotive industry will invest around €280 billion in research and development worldwide. The focus of the investments is on transformation, especially electromobility including battery technology, autonomous driving and digitalization. This means that our manufacturers and suppliers are investing an estimated annual €56 billion worldwide in R&D during this period - meaning they are continuing to increase their R&D spending.

In addition to the R&D investments, there will be another around €130 billion from 2024 to 2028, which will flow from the German automotive industry worldwide into, among other things, the construction of new factories and the conversion of plants and their equipment.

Sources: EU Industrial R&D Investment Scoreboard 2023, Stifterverband für die Deutsche Wissenschaft e. V. (Donors' Association for German Science), VDA