Trade tax revenues drop across Germany's Baden-Wurttemberg amid car industry troubles
taz
Trade tax revenue in Stuttgart, the capital of the German state of Baden-Wurttemberg, has fallen from 1.3 billion euros in 2024 to 750 million euros in the following year due to lower payments by carmakers Mercedes and Porsche, reported newspaper taz. Nearby Rastatt even saw its trade tax revenue drop by two thirds in 2025 compared to the past year’s average due to the crisis at Mercedes, its largest tax payer. Many cities and municipalities in the affluent southwestern state have been historically prosperous thanks to Germany’s auto industry and now are being hit particularly hard by the falling sales of cars.
About 50,000 jobs were lost in the automotive industry throughout Germany in the past year, with Bosch, one of the world’s largest automotive industry suppliers that is also based in the Stuttgart region, expected to cut 22,000 jobs by the end of 2030. The plummeting trade tax revenue and the car industry’s wider crisis is likely to also impact the upcoming state election on 8 March, where voters elect a successor to longtime Green Party state premier Winfried Kretschmann.
German car companies, which still focus primarily on combustion engine vehicles, are struggling to compete in the global market. Industry experts now agree that the industry has missed a chance to retain their market shares, and luxury brands who focused on the sedan market in China are now losing out to domestic sources who sell vehicles at lower prices, reported taz. Suppliers are affected too, with many unable to produce parts at prices cheaper than China, and some are leaving the industry altogether.
Despite falling profits, nearly one in three cars produced in Germany in 2025 were electric vehicles, according to figures by the German Automotive Association (VDA). Germany was therefore the second largest producer of electric vehicles in the world, behind China and ahead of the US. The EU’s transport commissioner recently announced that a planned EU ban on new combustion engine vehicles by 2035 would be amended to be more flexible, an outcome that Germany’s car industry had lobbied for intensively.