140 years ago a Mannheim engineer filed a patent that changed the world. This is the story of what came after — the mergers, the wars, the Wirtschaftswunder, and the BEV transition now under way.

On 29 January 1886, a 41-year-old engineer in Mannheim filed patent number 37435 with the Imperial Patent Office in Berlin. He called it Fahrzeug mit Gasmotorenbetrieb — a vehicle powered by a gas engine. That document is regarded as the birth of the automobile. The engineer was Karl Benz. His three-wheeled contraption made less than one horsepower and rattled along at ten miles per hour. It was, by any modern measure, useless. And it changed everything.

This is the story of what happened next — 140 years of German engineering culture. The parallel invention by Gottlieb Daimler sixty miles away. The 1926 merger that produced the Mercedes-Benz brand. The Bavarian aircraft firm that became BMW. The four-ring pact that saved four Saxon companies during the Great Depression. The 1937 state car that became the Beetle. Ferry Porsche's aluminium roadster in Austria in 1948. The Wirtschaftswunder. The 2015 diesel scandal. And the 545,142 electric cars Germany registered in 2025.

Every number here traces back to Kraftfahrt-Bundesamt (KBA), Mercedes-Benz Group's Konzernarchiv, and official OEM heritage records. If you are trying to understand why a modern German car feels the way it does, this article is where the answers begin.

What actually happened on 29 January 1886?

Benz was not a lonely tinkerer. By early 1886 he was 41, married with three children, and running Benz & Cie. in Mannheim — a modest engine works founded in 1883. The board thought his automobile obsession was a distraction. The patent application described what he had built on nights and weekends: a three-wheeled carriage with a single-cylinder four-stroke engine of 0.954 litres. Ten months later, on 2 November 1886, the patent was granted.

The vehicle was crude. Under one horsepower. Top speed around 16 km/h. No steering wheel — it turned via a vertical handle, closer to a bicycle than to a modern car. On 3 July 1886 the machine rattled along Mannheim's Ringstrasse in front of a small crowd. The local newspaper covered it briefly, then everyone went back to their carriages. Benz had a problem: he could not sell it.

Patent 37435: what the birth certificate of the automobile actually says

Patent 37435 runs eleven pages of technical drawings and description. Its opening paragraph is refreshingly modest: the construction aims at operating lighter vehicles carrying between one and four persons. No claim to revolutionise transport. Just a piece of engineering paperwork that would, in retrospect, look like the foundation of an industry.

KEY GERMAN TERM — Reichspatent Nr. 37435

The Reichspatent (imperial patent) system, run by the Kaiserliches Patentamt in Berlin, issued 37435 on 2 November 1886. Under German patent law, the effective date of protection was the filing date — 29 January 1886. Mercedes-Benz Group's Konzernarchiv in Stuttgart still holds the original documents. A facsimile is on public display at the Mercedes-Benz Museum. The full official text names Benz & Cie. as the assignee, not Benz personally — standard practice for company-owned inventions of the period.

Bertha's 1888 journey: what did the first long-distance drive look like?

Picture Mannheim in early August 1888. Sunday, dark. In the yard behind the family house, a 39-year-old woman named Bertha Benz is pushing an improved Model 3 out of the workshop. Karl is asleep upstairs. Her two sons — Eugen, 15, and Richard, 14 — are with her. She has not told her husband what she is about to do. She leaves him a note.

The plan is to drive to her mother's house in Pforzheim. Distance: 106 kilometres one way. No petrol station exists anywhere in the world. No map shows where an automobile can drive. Bertha buys ligroin — a light petroleum solvent — at a Wiesloch pharmacy, making it, by accident, the first filling station in history. When the fuel line clogs, she cleans it with a hat pin. When an ignition wire shorts out, she insulates it with her garter.

She arrives that evening. Two days later she drives back, a total distance of roughly 180 kilometres round trip. Reported in the German press within days, the trip was not adventure — it was marketing. Suddenly the Benz Patent-Motorwagen was no longer a curiosity. It was a machine that had carried a woman and two boys 180 kilometres over unpaved roads, alone, with a hat pin as toolkit. Sales for the Model 3 began in late summer 1888. Bertha had saved the family invention.

Meanwhile in Bad Cannstatt: what was Daimler doing sixty miles away?

Gottlieb Daimler was 52 when the Benz patent was filed. He had spent a decade as technical director at Deutz Gasmotoren-Fabrik, where he built high-speed engines with his designer Wilhelm Maybach. In 1882 he quit and set up his own workshop in a converted greenhouse in Bad Cannstatt, outside Stuttgart. His philosophy differed from Benz's. Benz wanted a complete automobile built from the ground up. Daimler wanted engines that would fit into anything moving: carriages, boats, airships, bicycles.

The Daimler Reitwagen of 1885 was essentially the world's first motorcycle. The four-wheeled carriage patented in August 1886 — seven months after the Benz filing — was a converted horse-drawn carriage rather than a purpose-built automobile. That philosophical split shaped the two firms for forty years. Daimler died in 1899. His engine business continued under Maybach. The Mercedes name entered in 1901, ordered by Emil Jellinek — an Austrian racing enthusiast — as a condition of a fleet purchase, after his ten-year-old daughter Mercédès.

The 1926 merger: the foundation of the Mercedes-Benz brand

By the early 1920s, both firms were in trouble. Hyperinflation had wiped out the German middle-class car buyer. On 28 June 1926 the two competitors merged into Daimler-Benz AG, headquartered in Stuttgart. The unified car brand was Mercedes-Benz, combining the Daimler-side commercial name with the family name — a compromise between two companies with equally strong claims to be the inventor of the automobile.

The 1926 union consolidated two engineering cultures that had spent forty years pretending not to compete. The birth of the Mercedes-Benz brand followed decades of parallel work. Karl Benz, then 82, joined the supervisory board. He lived to see Mercedes-Benz vehicles rank among the most sought-after luxury cars of the world. He died in April 1929, six months before the Wall Street Crash. The subsidiary of Daimler-Benz that eventually became the Mercedes-Benz Group is now one of the largest premium automakers on the planet.

Why did BMW start out building aircraft engines?

BMW's official founding was 7 March 1916, when Bayerische Flugzeugwerke was established in Munich to build military aircraft engines. The name Bayerische Motoren Werke dates from 1917 and became the corporate identity in 1922. First product: the BMW IIIa straight-six aircraft engine that set an altitude record of 9,760 metres in 1919. Then the Treaty of Versailles forbade Germany from building military aircraft.

A pivot became urgent. The firm turned to farm equipment, railway brakes, household items and motorcycle engines. The 1923 R32 motorcycle — flat-twin boxer, longitudinal mount, shaft drive — used an engine architecture still on BMW motorcycles a hundred years later. Automobile production began in 1928, when the firm bought a small factory in Eisenach that had been producing a licensed version of the Austin Seven under the Dixi name.

EXPERT NOTE — Why the aircraft origin still matters

In my assessment, everything about how BMW engineers still think about cars — the obsession with weight distribution, the smoothness of the inline-six, the flat-twin boxer that runs on their bikes — traces back to the aircraft-engine culture the firm started with in 1916. Aircraft engines are judged on power-to-weight, thermal management, and reliability at continuous high load. So are BMW's road cars. That is the engineering DNA of a firm that spent its first twelve years building things that had to work at 9,000 metres or fall out of the sky.

Four rings, four firms: what was Auto Union and why does it still exist?

The modern Audi logo has four interlocking rings. Ask most drivers what they represent and you get vague answers. The actual meaning: on 29 June 1932, four bankrupt Saxon firms merged into a single entity to survive the Great Depression. The four rings are those four names. Audi. DKW. Horch. Wanderer. All four founded by different engineers, all four losing money, all four rescued by combination rather than liquidation.

Horch was the original luxury make, founded by August Horch in 1904 in Zwickau. Horch had also founded Audi in 1909 after a dispute with his own board. DKW made two-stroke motorcycles and small cars. Wanderer had grown out of a bicycle factory. The Auto Union merger, orchestrated by the Sächsische Staatsbank, saved all four. Auto Union then dominated 1930s Grand Prix racing with the Silver Arrows Type A through Type D — mid-engined race cars designed by Ferdinand Porsche's engineering office in Stuttgart.

The Second World War destroyed the Zwickau and Chemnitz plants. Auto Union re-established itself in 1949 in Ingolstadt, under American occupation. Volkswagen acquired the firm from Daimler-Benz in 1964 and relaunched Audi in 1965. In 1969 came the fusion with NSU Motorenwerke. The DKW, Horch and Wanderer names were dropped. The four rings survived — a corporate identity that is technically the logo of a defunct 1932 conglomerate, still worn by every Audi built in Ingolstadt, Neckarsulm, Győr and San José Chiapa.

The state car: how did Ferdinand Porsche design the Beetle?

On 28 May 1937, the German government under the Nazi regime established Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH — the company for preparing the German People's Car. It was later renamed Volkswagenwerk. Ferdinand Porsche, then 62, had been commissioned to design a rear-engined, air-cooled family car that could seat four adults, cruise at 100 km/h on the new Autobahnen, and cost less than 1,000 Reichsmarks. The project was Hitler's personal obsession. The Beetle, from its birth, was propaganda.

Porsche was the obvious choice. His engineering office in Stuttgart, founded in 1931, had produced everything from luxury cars for Austro-Daimler to the Auto Union Silver Arrows. The KdF-Wagen prototype was ready in 1938. A purpose-built factory rose at Wolfsburg. The first production Beetles went to the Wehrmacht as the Kübelwagen military variant. Civilian production was suspended for the entire war.

In 1945 the British Army took the ruined Wolfsburg factory. Major Ivan Hirst restarted production — 1,785 Beetles were built in the second half of 1945. Nobody in Britain, France or the United States wanted the car. Rear-engined. Air-cooled. Small. Ugly. Every export survey concluded there was no market. Nine years later, the Beetle became Europe's best-selling car. It stayed in production for 65 years across three continents. Total production reached 21.5 million units before the last one rolled off the Puebla line in 2003. It also became, in 1948, the mechanical basis for the first Porsche.

Gmünd 1948: what does the birth of the Porsche brand look like?

Picture a sawmill complex in the Austrian village of Gmünd, Carinthia, in June 1948. Ferdinand Porsche is 72, just released from twenty months in a French prison on war-crimes accusations that were eventually dropped. His son Ferry, 38, has kept the family engineering office alive by moving it to Austria in 1944 to escape Allied bombing. There is no money. There are no facilities. There is a small team, a stack of Volkswagen spare parts, and Ferry's dream: to build a sports car under the family name.

On 8 June 1948, the prototype receives its general operating permit from the Carinthian state government. Chassis number 356-001. Mid-mounted flat-four engine of 1,131 cc, 40 horsepower, hand-hammered aluminium bodywork by Erwin Komenda, tubular space frame, Volkswagen Beetle running gear underneath. Curb weight: 585 kg. Unveiled to journalists at the Swiss Grand Prix in Bern on 4 July 1948. One week later it wins its class at a race in Innsbruck.

REAL-WORLD SCENARIO — Zuffenhausen 1950

In 1950, Porsche production moves back to Zuffenhausen, a district of Stuttgart, into a rented shed adjacent to the coachbuilder Reutter. The move is possible because a body maker capable of stamped steel panels is impossible to find in Austria. The first Stuttgart-built 356 rolls out that year. By 1965, when the 356 is replaced by the 911, roughly 76,000 units have been built. Every one is a lineal descendant of the aluminium roadster granted permission to drive on a summer day in 1948.

How did the Wirtschaftswunder rebuild automotive after 1945?

The Federal Republic was declared in May 1949. Four years earlier the industry had been rubble. Wolfsburg, Stuttgart, Munich, Zwickau: cities where the entire industrial base had been either bombed flat or dismantled and shipped east as reparations. Daimler-Benz had lost 70 percent of production capacity. BMW's Munich plant was in the American zone, its Eisenach car works in the Soviet zone. Auto Union's four factories were all in what became East Germany.

Between 1949 and 1963 came what is called the Wirtschaftswunder — the economic miracle. West German passenger car production of the domestic industry grew from 104,000 units in 1950 to 2.7 million in 1963. Ludwig Erhard's Soziale Marktwirtschaft combined market competition with strong labour protections and Mitbestimmung on company boards. Marshall Plan credit, Deutsche Mark stability from 1948, export-led growth from 1955. Volkswagen exported the Beetle to 145 countries. Mercedes-Benz rebuilt Untertürkheim. BMW nearly went bankrupt in 1959 and was saved by Herbert Quandt, who bought a controlling stake and funded the Neue Klasse 1500 sedan that defined its modern engineering culture.

The modern conglomerates: how many firms actually make German cars now?

Sixty years of consolidation collapsed the industry from twelve independent brands in 1963 to three groups today. Volkswagen Group owns Volkswagen, Audi, Porsche, Škoda, SEAT/Cupra, Bentley, Bugatti, Lamborghini, Ducati, MAN, Scania and Traton. BMW Group owns BMW, Mini and Rolls-Royce. Mercedes-Benz Group owns Mercedes-Benz cars and Mercedes-Benz Vans; the truck business spun off in 2021 as Daimler Truck AG. Opel is now part of Stellantis. The scale is difficult to grasp: Volkswagen Group alone employs about 683,000 people and produced 9.03 million vehicles in 2024. Together the three German groups produce roughly a fifth of the passenger cars sold globally.

September 2015: what actually broke in the diesel scandal?

On 18 September 2015 the US Environmental Protection Agency issued a Notice of Violation to Volkswagen AG. VW had installed defeat-device software in approximately 500,000 US-market diesel vehicles that could detect an EPA test cycle and switch on emission controls only during testing. In normal driving the vehicles emitted up to 40 times the legal NOx limit. VW admitted the fraud on 22 September. The share price fell 37 percent in two days. Within a week the scandal had expanded to 11 million vehicles worldwide, most of them in Europe.

WARNING — The consequences went far beyond Volkswagen

The Dieselgate scandal set off a decade of regulatory tightening across the EU, criminal investigations of Audi, Porsche, BMW and Daimler executives, forced buybacks of affected vehicles, and — most consequentially — the accelerated end of diesel as a passenger-car powertrain in Europe. Diesel share of new registrations in Germany was 47.9% in 2014. By 2025 it had fallen to 13.8% (KBA). That 34-point collapse is direct fallout from September 2015. If you are shopping for a used diesel in Germany today, the depreciation curve you are looking at was created by this scandal.

What do the 2025 numbers say about the German BEV transition?

Germany registered 545,142 battery-electric passenger cars in 2025, a 43.2% increase over 2024 (KBA Jahresbilanz, published 6 January 2026). BEV share of the new-car market reached 19.1% for the full year, climbing to 22.8% in Q1 2026. Combined electrified totals — BEV plus plug-in hybrid — hit 30.0% of new registrations for the first time in KBA history. Diesel collapsed to 13.8%. Petrol fell to 27.2%. Total registrations reached 2,857,591, up 1.4% year-on-year. The BEV fleet crossed the two-million threshold on 1 January 2026 — 2,034,260 units on German roads.

Volkswagen Group brands took the top five BEV models. The 2025 Volkswagen ID.7 was the best-selling electric car in the country, followed by the ID.3, ID.4/ID.5, Škoda Elroq and Škoda Enyaq. BMW held second on brand share at 9.5%. Mercedes was fifth. Tesla registrations fell 48.4% to 19,390 units, dropping to ninth in the BEV brand ranking. Chinese entrants — led by BYD, up 706% — took less than 1% of the total German new-car market but grew fast off a very small base.

In my assessment, the 43% year-on-year growth number needs context. It sits against a very weak 2024 base after the Umweltbonus subsidy ended in December 2023. Smoothed against 2023, two-year compound growth is closer to 2 percent — essentially flat. The market is recovering, not booming. Whether the new socially graduated Förderung, launched 1 January 2026, sustains organic demand beyond the pull-forward window is the strategic question hanging over Wolfsburg, Munich and Stuttgart right now.

Key takeaways

  • Reichspatent 37435, filed 29 January 1886 and granted 2 November 1886, is regarded as the birth certificate of the automobile.
  • Bertha Benz's 180 km round-trip journey in August 1888 was the marketing act that saved the Motorwagen from commercial obscurity.
  • Daimler-Benz AG was formed on 28 June 1926 in Stuttgart, uniting the Mercedes and Benz brands under one roof.
  • BMW's official founding was 7 March 1916 — as an aircraft-engine maker, not an automotive firm; the first BMW car came in 1928.
  • Auto Union AG (29 June 1932) merged Audi, DKW, Horch and Wanderer — the four rings still worn by Audi today represent those four Saxon firms.
  • Volkswagen was founded 28 May 1937 as a state-owned firm under the Nazi regime; the Beetle ran until 2003 with 21.5 million units produced.
  • Porsche as a brand was born on 8 June 1948 in Gmünd, Austria, when the 356/1 received its road-approval certificate.
  • The Wirtschaftswunder rebuilt West German car production from 104,000 units in 1950 to 2.7 million in 1963.
  • Three groups now dominate: Volkswagen Group, BMW Group and Mercedes-Benz Group — together they produce roughly one fifth of passenger cars sold globally.
  • The 2015 diesel scandal cost VW Group over €32 billion and accelerated the collapse of diesel share in Germany from 47.9% (2014) to 13.8% (2025).
  • 2025 BEV registrations reached 545,142 units (+43.2% YoY), taking 19.1% of the new-car market; the parc crossed the two-million-vehicle threshold on 1 January 2026.

Sources & methodology

  • Mercedes-Benz Group — Konzernarchiv, official history 1885–1926, including original text of Reichspatent 37435 and Bertha journey sources.
  • BMW Group — official history pages; Bayerische Flugzeugwerke founding documents dated 7 March 1916.
  • Audi AG — Company History Vol. 17227 (audi.com), founding dates for the Auto Union merger and NSU consolidation of 1969.
  • Volkswagen Group — official corporate history; 28 May 1937 founding record; 2024 annual report.
  • Porsche AG — Porsche Newsroom heritage archive on the 356/1 and the 8 June 1948 Carinthian road certification.
  • Kraftfahrt-Bundesamt (KBA) — Jahresbilanz 2025 published 6 January 2026; Bestand am 1. Januar 2026 stock data.
  • European Alternative Fuels Observatory — Germany BEV fleet data January 2026, cited to KBA.
  • Personal records: Artyom Semenov — ongoing coverage of the German automotive industry across 2023–2026.

This pillar sits at the centre of the History cluster. Deeper spokes: