Automotive and Mobility

Automotive and mobility law in Germany: the key issues

Automotive and mobility companies in Germany face a transformation on several fronts at once: the shift to electric drives, software-defined and connected vehicles, automated driving, new competitors, tariffs and price pressure along the supply chain. The law reflects each of these changes.

Supply contracts and supplier crises dominate the commercial agenda; type approval, product compliance and recalls govern market access; the Road Traffic Act (Straßenverkehrsgesetz, StVG) now allows autonomous vehicles in defined operating areas; the EU Data Act gives vehicle users access to the data their cars generate; and charging infrastructure, battery rules and mobility services have their own regulatory frameworks. Restructurings of plants and suppliers bring employment law and insolvency law to the fore.

This page summarises the legal framework for carmakers, suppliers, mobility providers, charging operators and investors in the German automotive and mobility sector, and links to our detailed practice pages and insights. It is part of our sectors coverage.

Supply chain contracts and supplier crises

Automotive supply chains are long, specialised and tightly scheduled. Framework supply agreements, call-off orders, quality assurance agreements, tooling agreements and logistics agreements define the relationship between carmakers and their tier-1, tier-2 and tier-3 suppliers. Carmakers' purchasing terms are standard terms and are subject to judicial review under § 307 of the Civil Code even between businesses, which limits one-sided clauses on liability, recall cost allocation, price reductions and termination. Inspection duties under § 377 of the Commercial Code are usually modified by quality agreements so that the supplier bears responsibility for outgoing goods inspection.

Price pressure, volatile volumes and the transition away from combustion engine components have pushed many suppliers into crisis. Agreed prices are binding, and adjustment for changed circumstances under § 313 BGB is possible only exceptionally. Suppliers in distress often negotiate support agreements with their customers, combining price increases, accelerated payments, tooling purchases and production guarantees, sometimes as part of a restructuring under the Corporate Stabilisation and Restructuring Act (StaRUG).

Customers can seek preliminary injunctions to enforce deliveries, while suppliers dependent on a single customer can invoke the prohibition on abuse of relative market power (§ 20 GWB). Our insight on automotive supply chain disputes covers these conflicts, and our page on commercial contracts explains the standard terms review.

Supply chain due diligence in automotive and mobility

Carmakers and large suppliers are subject to the Supply Chain Due Diligence Act (LkSG) if they have at least 1,000 employees in Germany, and they pass due diligence expectations down to their suppliers through codes of conduct, questionnaires and audit rights.

Raw materials for batteries and electronics, such as cobalt, lithium, tin, tantalum, tungsten and gold, carry particular human rights and environmental risks and are also addressed by the EU Conflict Minerals Regulation and the Battery Regulation. The EU Forced Labour Regulation will prohibit products made with forced labour from 14 December 2027. For the automotive and mobility sector, these regimes overlap, so a single, risk-based supplier compliance system is more efficient than separate processes for each law.

Tooling, insolvency and continuity of supply

Ownership of customer-specific tools is decisive when a supplier fails. Tooling agreements should clearly establish ownership or security rights, marking and access rights, so that the customer can remove tools and move production. In supplier insolvencies, administrators often continue production to preserve value, and customers negotiate continuation agreements covering prices, liquidity support and transfer of production. Insolvency-triggered termination clauses in continuing supply contracts are often unenforceable, so contractual protection must be designed with insolvency law in mind.

Type approval, product compliance and recalls

Motor vehicles may only be registered in the EU if they hold an EU type approval or an individual approval. Under Regulation (EU) 2018/858, approval authorities and market surveillance authorities share responsibility for ensuring that vehicles, systems and components meet the technical requirements, and the European Commission can carry out its own checks and impose administrative fines on manufacturers. In Germany, the Federal Motor Transport Authority (Kraftfahrt-Bundesamt, KBA) is the type approval and market surveillance authority. It can order recalls, and the emissions cases of recent years have shown how quickly regulatory findings translate into mass claims; see our insight on the BGH diesel ruling.

Product liability applies alongside type approval. The new EU Product Liability Directive applies to products placed on the market after 9 December 2026 and includes software, updates and cybersecurity defects within its scope, which is especially relevant for software-defined vehicles and over-the-air updates. Recalls require coordination between the manufacturer, suppliers, the KBA, dealers and insurers, and communication with vehicle owners must be accurate and timely, and recall costs are frequently the subject of recourse claims along the supply chain. See our page on product liability and product compliance.

Emissions, CO2 targets and batteries

Fleet-wide CO2 emission targets for new cars and vans under EU law drive the shift to electric vehicles, and their design and possible flexibilities have been the subject of intense political debate. The Battery Regulation (Regulation (EU) 2023/1542) imposes requirements on carbon footprint declarations, recycled content, labelling and due diligence for battery supply chains, and requires a battery passport for electric vehicle batteries from 18 February 2027.

Manufacturers and battery suppliers must align their supply contracts and data flows with these requirements. Battery due diligence obligations under the Battery Regulation were postponed to 18 August 2027, which gives companies time to integrate them with existing supply chain compliance, but the data needed for carbon footprint declarations and the passport must be collected from suppliers well in advance.

Autonomous driving under the StVG

Germany was among the first countries to create a legal framework for driverless operation. Since 2021, motor vehicles with an autonomous driving function, which can perform the driving task without a driver in a defined operating area, may be operated on public roads if they are approved and the operating area is authorised (§§ 1d ff. StVG). Instead of a driver, a technical supervisor (Technische Aufsicht) monitors the vehicle remotely and can deactivate it or approve driving manoeuvres. The Autonomous Vehicles Approval and Operation Ordinance (AFGBV) sets out the technical requirements, approval procedure and duties of keepers and technical supervisors, and keepers must store extensive operating data.

Liability follows the general road traffic regime: the keeper is strictly liable for damage caused by the operation of the vehicle, and the liability caps for personal injury are doubled to EUR 10 million where damage results from an automated or autonomous driving function (§ 12 StVG). Manufacturers remain exposed to product liability. Insurance cover must reflect the higher caps and the new risk profile. Typical early use cases are shuttle services, logistics on defined routes and automated valet parking. See our insight on autonomous driving law in Germany.

Vehicle data, the Data Act and cybersecurity

Connected vehicles generate large volumes of data about the vehicle's condition, use and environment. The EU Data Act (Regulation (EU) 2023/2854) gives users of connected products, including vehicle owners and fleet operators, a right to access the product data and related service data and to share it with third parties such as independent repair shops, insurers and service providers.

Connected products placed on the market after 12 September 2026 must be designed so that data is accessible to the user by default (access by design). Trade secrets can be protected through agreed confidentiality measures and, exceptionally, refusal. In Germany, the Federal Network Agency is the competent authority under the Data Act Implementation Act (DADG). See our insight on access by design under the Data Act and our page on the EU Data Act.

Vehicle data is often personal data, so the GDPR applies in parallel, and location and driving behaviour data require particular care. Business models based on vehicle data, such as usage-based insurance, fleet management or predictive maintenance, need a legal basis for each processing purpose and transparent information for drivers, who are not always the vehicle's owner or the Data Act user. Vehicle cybersecurity and software updates are regulated by UN regulations incorporated into EU type approval, which require a certified cybersecurity management system, while components and aftermarket products with digital elements may fall under the Cyber Resilience Act.

EV charging and mobility services

The expansion of charging infrastructure is governed by the EU Alternative Fuels Infrastructure Regulation (AFIR), which sets coverage targets along the trans-European transport network and requires that publicly accessible chargers deployed from 13 April 2024 accept widely used payment instruments for ad hoc charging.

The Building Electromobility Infrastructure Act (GEIG) requires charging points and pre-cabling in certain buildings, and tenants and apartment owners can demand consent to install charging equipment. For automotive and mobility companies building charging networks, site selection and grid connection are often the longest lead items. Charging point operators must also consider energy law, metering and calibration law and price transparency rules. See our insight on EV charging infrastructure law.

Mobility services such as ride pooling, car sharing and on-demand transport are regulated by the Passenger Transport Act (PBefG), which since its 2021 reform recognises on-demand services integrated into public transport and pooled demand-responsive services by private operators (§ 50 PBefG), subject to licensing and local conditions. Car sharing benefits from parking privileges under the Car Sharing Act, and municipalities can grant station-based providers special use of public roads after a transparent selection procedure. For automotive and mobility providers, these licensing rules decide whether a business model can scale across cities. Municipal transport companies and private operators increasingly cooperate, which raises procurement and state aid questions.

Automotive and mobility transactions and restructuring

The transformation of the industry drives transactions: carve-outs of combustion engine businesses, sales of non-core plants, joint ventures for batteries, software and charging, investments by Asian and US companies in German suppliers, and distressed acquisitions from insolvency. Buyers from outside the EU must consider investment screening where targets are active in critical technologies such as semiconductors, automated driving or batteries; see our page on foreign investment control. Plant closures and capacity reductions require consultation with works councils, reconciliation of interests and social plans, and collective redundancy notifications; see our page on dismissals and workforce restructuring.

For distressed suppliers, the StaRUG framework allows restructuring plans binding dissenting creditors, and self-administration proceedings allow management to stay in control under supervision. Customers and lenders play a decisive role in these processes and should coordinate their positions early.

Employment law in automotive and mobility restructurings

Employment relations in automotive and mobility companies are shaped by strong works councils and sector-wide collective agreements in the metal and electrical industry. Transformation projects often combine site agreements guaranteeing employment for a period with investment commitments, voluntary redundancy programmes, partial retirement and transfer companies (Transfergesellschaften) that provide employees with training and placement support for up to twelve months. Board-level co-determination gives employee representatives seats on the supervisory boards of large carmakers and suppliers, which affects how restructuring decisions are prepared and communicated. Early and structured involvement of employee representatives is usually decisive for the timetable of any restructuring.

Mass claims and disputes

The automotive and mobility sector has experienced large-scale litigation, from emissions claims to cartel damages actions concerning components and trucks. Since 2023, qualified consumer associations can bring redress actions under the Consumer Rights Enforcement Act (VDuG), which allow damages for many consumers to be claimed in one procedure. Companies should consider the risk of collective proceedings when handling recalls and regulatory findings; see our page on collective actions and mass litigation.

How TRW & Co helps

We advise carmakers, suppliers, mobility providers, charging operators and investors in the automotive and mobility sector. We draft and negotiate supply, quality, tooling and development agreements, support supplier crisis negotiations and restructurings, and represent clients in supply chain disputes. We advise on type approval and product compliance questions, recalls and product liability, autonomous driving, vehicle data under the Data Act and the GDPR, charging infrastructure and mobility services. We act on carve-outs, joint ventures and acquisitions, including investment screening and employment aspects. To discuss your matter, please contact us. This page provides general information, not legal advice.