> has strict EV quotas and no one wants to buy German EVs that are too expensive and less capable than Chinese made EVs

Both China and the US have enacted trade barriers against EU originated auto drive goods.

A Chinese VW ID4 is manufactured in Shanghai and an American one in Tennessee. And that is the crux of the issue - consumers are still open to buying a German badged product, but it won't be "Made in Germany".

And where else can Germany export?

The individual EU states are protective about exports by leaning hard on nationalism and union support as seen in France (Renault+Stellantis) and Italy (Stellantis), India demands China- and US-style JVs and domestic manufacturing as well even despite the EU FTA, Japan and SK prefer buying domestic, Russia is blocked due to sanctions, ASEAN+Africa is flooded with Chinese, Japanese, and Indian manufactured cars already, and South American is flooded with Chinese, American, Japanese or domestically manufactured cars.

Germany Inc will remain in Germany as long as Germany makes itself attractive. Otherwise, they will leave, as they have already done so for the US, China, the CEE, and increasingly India.