(Re)coordinating the German Political Economy: E-mobility and the Verkehrswende

Abstract

ABSTRACT Germany has long been admired for its coordinated state-business relations, aligning domestic industry, particularly the automobile sector, with political and economic objectives. This article finds, however, that in the case of the automobile sector’s transition to electric vehicles, there is little evidence of coordination. Informed by 31 interviews and a document analysis, the data shows instead that the Diesel Scandal proved to be a pivotal moment in German politics, as the state has looked to distance itself from the automobile industry. To reflect the data, I adjust Meckling and Nahm’s analytical heuristic to argue that against the backdrop of e-mobility, auto-state-business relations have become un-coordinated. I subsequently contend that the consequences of un-coordination stand to have profound implications for Germany, as it cedes ground to Tesla and China in the global automobile market. As a result, a decline in the automobile industry threatens the export and fiscal surpluses exhibited in recent years and thus the German model. I conclude that (re)coordinating auto-state-business relations, and the German political economy more broadly, will require developing the Verkehrswende.