Ford Motor Co. and German auto supplier Bosch are both taking dramatic steps to cut costs and jobs in Germany, as the European automotive industry faces a perfect storm of weak demand, stiff competition, and mounting economic pressures. On September 16, 2025, Ford announced it will eliminate 1,000 additional positions at its Cologne electric-vehicle plant, a move that comes just two years after the company opened its Electric Vehicle Centre in the city with high hopes for the future of battery-powered cars in Europe. The job reductions are a stark indicator of the sluggish demand for electric vehicles (EVs) that has taken hold across the continent.
Ford’s latest round of cuts is part of a broader and ongoing restructuring effort. The company had already revealed plans last year to eliminate 4,000 jobs across Europe by the end of 2027, affecting plants in both Germany and Britain. The recent announcement adds to the growing tally of layoffs, underscoring the challenges Ford and other automakers face as they attempt to pivot from gasoline to electric powertrains in a rapidly changing market.
According to Ford’s statement, the main culprit behind the workforce reduction is the gap between projected and actual consumer demand for electric vehicles. When Ford opened its state-of-the-art Electric Vehicle Centre in Cologne in 2023, expectations were high that European drivers would quickly embrace EVs. However, as the company now admits, those projections have proved overly optimistic. "European drivers were not buying as many electric cars as the company projected when it opened its Electric Vehicle Centre in Cologne just two years ago," Ford said in a statement quoted by The New York Times.
The reasons for the underwhelming demand are multifaceted. Ford points to a lack of investment in charging infrastructure and a scarcity of government incentives as major factors holding back widespread adoption. Without enough charging stations and with limited financial support from policymakers, many potential buyers are apparently holding off on making the switch to electric. As a result, Ford will scale back production at the Cologne plant to a single-shift operation starting in January 2026, a move that will directly affect the plant’s workforce.
Ford has stated that it intends to offer buyout packages to the affected employees, expressing hope that most of the severances will be voluntary rather than forced. This approach, the company says, is designed to soften the blow of the layoffs and provide some measure of support to workers facing uncertain futures.
The struggles at Ford are emblematic of broader headwinds facing the European automotive industry. German automakers such as BMW, Mercedes, and Volkswagen are also feeling the pinch of sluggish EV sales. Despite recent announcements of new battery-powered cars featuring cutting-edge technology and software, these companies are battling to win over increasingly cautious customers. The slow pace of EV adoption is not just a Ford problem—it’s an industry-wide challenge.
Compounding the difficulties for European automakers is the rise of Chinese competitors, most notably BYD. The world’s largest EV manufacturer, BYD has made significant inroads into the European market with a lineup of electric and hybrid vehicles that are often more affordable than those produced by established Western brands. BYD’s aggressive expansion plans include opening its first European plant in Hungary later in 2025, a move that is likely to intensify competition and put further pressure on local manufacturers. As Ford acknowledged, "Like other automakers in Europe, Ford faces increasing competition from Chinese rivals that are making inroads into the market despite tariffs imposed by the European Union last year."
Trade policy has also played a significant role in shaping the current landscape. European automakers have been grappling with import tariffs imposed by the United States under the Trump administration. Initially set at a punishing 27.5 percent, the tariff rate was reduced to 15 percent after a trade deal was reached between the U.S. and the European Union in August 2025. However, the lower rate has yet to be applied, leaving companies like Ford in a difficult position. The financial toll of these tariffs has been substantial—Ford reported in July 2025 that it lost $36 million in the second quarter, a sharp reversal from a $1.8 billion profit the previous year. The company blamed tariffs for much of the downturn, estimating that they would cost Ford $2 billion in 2025 alone.
It’s not just Ford feeling the heat. On the same day as Ford’s announcement, German industrial giant Bosch revealed it would implement deeper cost cuts and warned that its Mobility division faces an annual shortfall of about €2.5 billion (approximately $2.95 billion). Bosch cited mounting competition and lackluster sales as key drivers behind the financial gap. The company’s move highlights how even suppliers—often seen as the backbone of the automotive ecosystem—are being forced to adapt to the new economic realities.
The convergence of these factors—tepid consumer demand, inadequate infrastructure, limited incentives, fierce competition from China, and trade barriers—has created a tough environment for Europe’s auto industry. While some automakers are attempting to fight back with new models and technological innovations, the market remains unforgiving. BMW, Mercedes, and Volkswagen have all recently unveiled battery-powered cars with updated technology and software, but whether these efforts will be enough to reignite consumer interest remains to be seen.
For the thousands of workers at Ford’s Cologne plant and elsewhere, the future is uncertain. While buyout packages may ease the transition for some, the broader trend of job cuts and restructuring is likely to persist as long as demand for electric vehicles lags behind expectations. The industry’s hopes for a rapid shift to electrification have run headlong into the realities of consumer hesitancy and economic headwinds.
As 2025 draws to a close, the European automotive sector finds itself at a crossroads. The dream of a swift and profitable transition to electric mobility is facing a sobering reckoning. Ford’s decision to slash jobs in Cologne and Bosch’s warning of a major shortfall are just the latest signs that the road ahead will be anything but smooth. The coming years will test the resilience and adaptability of Europe’s automakers as they navigate a rapidly evolving landscape, where the only constant appears to be change itself.
For now, workers and industry leaders alike are left to grapple with tough questions about the future—questions that may not have easy answers in a world where technology, policy, and global competition are all shifting underfoot.
