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Dissatisfaction with Germany鈥檚 energy policy and soaring prices are driving company investments out of the southwestern economic powerhouse state of Baden-W眉rttemberg, a survey by the Landesbank Baden-W眉rttemberg (LBBW) found. One quarter of the more than 350 companies surveyed had already relocated part of their production elsewhere, and an additional 38 percent were considering this step. 鈥淏ureaucracy, a lack of skilled workers and an aged infrastructure鈥� create the greatest difficulties for companies in the state, said LBBW board member Thorsten Sch枚nenberger in an聽聽in the Staatsanzeiger Baden-W眉rttemberg. The survey found that energy supply was among the greatest worries of companies, with Sch枚nenberger commenting that companies were suffering from a lack of planning security and entrepreneurial freedom.

Nearly 80 percent of companies in the survey said they believed the energy transition鈥檚 success was in peril. While most businesses were committed to increasing energy efficiency, lowering demand and using power from clean sources, many also encountered difficulties when planning to change their supply, for example through installing their own power or heat production devices. Marcel Z眉rn, LBBW expert for energy, said many energy-intensive companies were now shunning Germany out of fears that energy prices will rise further. Given that the country plans to invest about 450 billion euros into its power grid by 2037, 鈥渃ompanies are asking who is going to fund this and what effects it will have on future power prices鈥�, Z眉rn said. 鈥淢any investment decisions in energy-intensive processes will, therefore, no longer be made in favour of Germany,鈥� he argued.

In a separate , the LBBW said Baden-Wurttemberg was grappling with Germany鈥檚 ongoing economic downturn. The affluent state鈥檚 GDP shrank 0.2 percent in 2024 and is projected to contract by another 0.7 percent in 2025, the state bank said. Baden-W眉rttemberg is a centre of automotive production, with Mercedes, Porsche, and many small suppliers being headquartered in the state. The slump in car sales and difficulties in the transition away from combustion engines towards electric vehicles are therefore causing the state greater troubles than other regions. The bank estimates that the industry in the state could shed almost 105,000 jobs by 2040, since making electric cars requires fewer workers.