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Bosch, one of the world’s largest car suppliers, has warned government budget cuts and surging populism are threatening European plans to decarbonise.
Western governments were often “under both austerity pressure and populist criticism”, said chief executive Stefan Hartung.
“Much depends [ . . .] on whether our democracies can withstand these pressures and maintain their climate-policy priorities in the long term,” he added.
The warning came as Bosch, which is majority owned by a charitable foundation, on Wednesday said its preliminary 2023 figures showed its profit margins before interest and taxes reached 5 per cent.
This was 2 percentage points below its previous guidance, which Hartung said the company was now only expecting to reach in “one or two” years.
Bosch, which in the past few months has announced thousands of job cuts across its sprawling car, industrial technology, construction and consumer goods business, said it had been forced to respond to slower than expected adoption of climate-friendlier new technologies.
“When implementation is inconsistent, as we recently saw with Germany’s sudden abolition of electric-car subsidies, problems arise,” said Hartung.
He was referring to an unexpected cut that Berlin made last year after a shock ruling deemed a €60bn special fund for environmental projects unconstitutional, plunging the country into a budget crisis.
German sales of electric vehicles fell 16 per cent in 2023, according to the country’s car industry lobby group VDA, which has forecast sales of battery-powered cars to drop a further 9 per cent in 2024.
Bosch’s head of mobility Markus Heyn said carmakers should not “patronise” potential customers, as Hartung pointed out that Europe still “lacks affordable electric cars [and] charging stations”.
Bosch is the largest among Germany’s network of suppliers to the car industry, which in past decades has expanded across the world alongside its key customers Volkswagen, Mercedes-Benz and BMW.
These companies, many small and medium-sized, have come under pressure as the transition to electric cars, which are no longer defined by their engine but by software, forces them to develop new products.
“However, we’re seeing a delay in the market penetration of such technologies, and momentum from the market has slowed,” said Hartung, pointing also to uncertainty in the previously hot German heat pump market after Berlin faced opposition to its plans to phase out gas boilers.
“My appeal to policymakers is to give us more predictability,” the chief executive added.
