VDA Mobility Innovation Summit 2026 "The German Automotive Industry Is Well-Positioned for Future Challenges—The Location Is Not"

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On March 26 and 27, 2026, the Mobility Innovation Summit took place for the second time in a row at the Berlin Congress Centrum. In a rather subdued mood. While the German automotive industry believes it is well positioned for future challenges in terms of electromobility, software-defined vehicles, autonomous driving and artificial intelligence, the location is unfortunately not.

The automotive industry is currently facing serious challenges: the accelerated shift towards electromobility, backlogs in software development and battery technology as well as high pressure on margins due to competition from China and the USA are causing problems for manufacturers and suppliers. Added to this are supply chain problems, high production and energy costs and high bureaucratic costs in Germany. Each of the 400 attendees was aware of what the time had come. Nevertheless, the industry considers itself well positioned, as VDA President Hildegard Müller emphasized in her opening speech: "The innovative strength of our companies is unique and the determination with which companies are driving forward the climate-neutral and digital transformation is great."

However, she also explained that this is not enough to generate further growth and prosperity in this country. "The future is only created where technical innovations and new ideas are not only invented, but can also be implemented. In order for companies in the German automotive industry to continue to demonstrate their technological leadership in Germany, the right framework conditions and innovation and investment-friendly policies are needed above all. However, we are currently experiencing that the lack of competitiveness of the location is the greatest challenge for companies and is already leading to relocation tendencies. It is therefore crucial that the resilience and competitiveness of Germany as a business location be strengthened - that is the decisive lever. As the German automotive industry, we have proven our strength, adaptability and innovative power time and time again. Now Berlin and Brussels must prove themselves and put everything on the agenda that enables prosperity, growth and innovation - as we are experiencing here at the Mobility Innovation Summit," said Müller.

Batteries Made in Germany?

But how can Germany be brought to the forefront in the field of battery technology, for example? And not just bring it forward, but to the top? The German and to some extent the European battery industry is not only in a deep crisis, it is fighting for survival. Northvolt is bankrupt, the future of the planned Gigafactory in Heide is in the stars. Customscells insolvent. Porsche completely discontinued battery cell production at its subsidiary Cellforce, leaving only research. The BMZ Group was sold out of insolvency to Skion. Automotive Cells Company, the joint venture between Mercedes-Benz, Stellantis and TotalEnergies, is in a deep crisis - the planned gigafactories in Germany and Italy had to be stopped. Nevertheless, Dr. Rolf-Dieter Jungk, State Secretary at the Federal Ministry of Research, Technology and Space, explains: "We want to establish competitive production by 2035. We have everything we need for this in our country." How will this work? "Batteries are an important part of Germany's High-Tech Agenda. The High-Tech Agenda is clearly geared towards value creation. It secures and creates added value in Germany and it is a participatory agenda: roadmaps are being created along the lines of climate-neutral mobility and five other key technologies - binding, transparent, for everyone and with a clear distribution of roles. In this way, smart ideas from research lead to competitive value creation and prosperity. And innovations get on the road faster." However, Jungk did not specify what this should look like in detail.

SDV Is a Game Changer, But Also a Challenge

Software is becoming the central differentiating factor in vehicles - more and more functions are no longer being created by hardware, but by code. This significantly increases complexity and calls for new, centralized architectures and cooperative development models. So far, so good, but unfortunately not so simple. The development and implementation of software-defined vehicles (SDVs) in Europe is facing key challenges, primarily due to the complexity of the transformation, intense competition and the shortage of skilled workers. The European automotive industry must change from hardware-centric processes to software-centric models. How can this be achieved? Non-differentiating software components, for example, no longer have to be developed in-house: Open platforms and open source approaches enable common standards, higher development speed and more efficient use of resources. New development ecosystems, shared tool chains and overarching collaborations between car manufacturers, tier 1 suppliers, semiconductor manufacturers and software and tech companies are emerging.

Hardware requirements are also increasing. Powerful, flexible and energy-efficient architectures are in demand - from open standards such as RISC-V to chiplet technologies. Infineon, for example, is working on automotive microcontrollers based on RISC-V. RISC-V plays an important role because it is an open instruction set architecture - a common, license-free construction principle for processors. It enables new developments on a common basis, without manufacturer dependencies. A lean basic ISA is supplemented by standardized extensions for performance, vectors, functional safety and domain-specific acceleration. Openness strengthens tools and software - and creates transparency for long-term roadmaps.

Security

In view of the increasing digitalization of vehicles, the attack surface of modern vehicles is also growing. As a result, cybersecurity is increasingly coming to the fore and must be considered as a central component of future vehicles right from the start of the development process, as VDA Managing Director Dr. Marcus Bollig emphasized: "As connectivity increases, so do the requirements for robust security architectures. For example, over-the-air updates or vehicle-to-X communication require powerful encryption and authentication procedures as well as continuous monitoring systems that detect and ward off potential attacks at an early stage. As an industry, we rely on international standards to ensure security and trust in the long term." Martin Arend, Head of Automotive Security at BMW, showed that it is not easy to keep an eye on all regulations worldwide: "Complexity and security will never be the best of friends. The contradictions in the regulations make the situation difficult. He posed the question: "Security threats are spread worldwide, just like cyber attacks. Why are we still acting locally?"

Search for Strategy, Offer Challenging Site Conditions

Electrification, modern battery technologies and data-based software solutions play an important role. This is nothing new and German car manufacturers and their suppliers are at the forefront, as evidenced by last year's patent applications, for example. The automotive industry registered the most patents of all sectors in Germany in 2025. All of the top 10 applicants come from this sector - manufacturers and suppliers - and cover around 30 percent of all patents. Bosch leads the way with 4,109 applications, followed by Mercedes-Benz with 2,726 and BMW with 2,553. This is also due to considerable investment in research and development. "To ensure that this leading position can be maintained in the future, the framework conditions for Germany as a location for research and innovation must be further strengthened and expanded in a targeted manner," demands Hildegard Müller and others. After all, "competitiveness, economic success and jobs can only be secured in the long term, far beyond the automotive industry, if research results are quickly translated into marketable products." Dr. Jörg Butzer, CTO of Mercedes-Benz, and Dr. Mathias Pillin, CTO of Bosch, attempted to answer the questions in the session "Strategy under the sign of transformation":

• What specific political measures and reforms are needed now?
• Which industrial strategy points the way forward?
• And what can and must companies do to successfully shape change?

Questions to which there are only very limited answers. Because: "In the end, the customer decides, not a law," as Butzer put it in a nutshell. Pillin explained with regard to the hyped topic of artificial intelligence: "AI alone does not solve the scaling problem of level 4 vehicles"

Regulations Should Not Slow Down the Industry

Alexander Vlaskamp, CEO of MAN Truck & Bus, received applause for his presentation. He made it clear that although legal framework conditions are necessary, they should not slow down an entire industry and should therefore at least be thoroughly thought through. Because: "Without transport, everything stands still". This does not mean that MAN is refusing to embrace progress. The manufacturer is not only increasingly working on software-defined commercial vehicles or Level 4 technologies to make life easier for its drivers, but also on bidirectional charging and low-emission commercial vehicles.

However, regulations such as Euro 7 complicate the business, which is already heavily dependent on general economic developments and has to contend with high inflationary pressures and fluctuating demand. "We are calling for Euro 7 to be scrapped. The commercial vehicle industry only works if we offer efficient vehicles. If we were to price in all the regulations, our customers would no longer be able to afford new vehicles."

Dr. Joachim Post, Member of the Board of Management for Development at BMW, painted a much more realistic picture of the situation in Germany when it comes to battery cell technologies, which State Secretary Jungk tried to paint a pretty picture of the day before. "21 percent of the planned battery cell factories in Germany have been stopped or postponed in the long term." No wonder, as he estimates that it takes three to five years to build and commission such a factory. "Approval procedures and financing are a nightmare. Not to mention the energy costs." In his view, relying solely on electric drives to decarbonize the transport sector is not the solution. Instead, several technologies must play a role. He appealed to politicians to take an example from China: "Look at the Chinese five-year plan. They don't just invest in one technology. If we do that, we will soon be running behind again when it comes to hydrogen, for example. Both Post and Vlaskamp concluded by emphasizing the importance of uniform European regulations and that national solo efforts would do more harm than good.

Conclusion

"We clearly need more courage, openness and opportunities to implement innovations at all levels of government and society," demanded Hildegard Müller in her opening speech at the VDA Mobility Innovation Summit. This sounds very simple on paper, but it is a Herculean task. Politicians must master the balancing act between climate protection, job preservation and promoting innovation. High energy costs and overwhelming bureaucracy are factors that have been slowing down the industry for some time now. Solutions such as the Bureaucracy Relief Act have yet to be felt. A lack of competitiveness in future technologies, for example when it comes to battery technology, certainly plays a role. The end consumer decides which drive technology they want in their vehicle. The demand for electric vehicles is not increasing to the desired extent, which is due to a combination of financial, technical and infrastructural factors. Despite lower operating and maintenance costs, electric vehicles are often significantly more expensive to purchase than combustion engines, which is particularly important in today's economically uncertain times. Although the public charging infrastructure is growing, it is still perceived as inadequate - especially if you do not have the option of charging privately or at your employer. All in all, a number of points were addressed at the VDA Mobility Innovation Summit, but solutions were left open. (se)

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