From 1900 to 1921 he was head of the newly established State Secretariat of the Bavarian SPD and was, therefore, a close associate of the chairman Georg von Vollmar.

Auer was viewed as the great rival of socialist Kurt Eisner[a] who was shot dead in Munich by a German nationalist on 21 February 1919.

Auer—the leader of the legal socialists—appeased the dissatisfied workers by vouching for the fulfillment of their demands, promising that he would lead the delegation to the minister, and that no one who participated in the strike would be fired or punished.

In the state elections of 12 January 1919, the USPD suffered a crushing defeat and Eisner wanted to declare his resignation as Prime Minister at the inaugural session of the Diet on 21 February 1919 but was shot on the way to the parliament building by Count Anton Graf von Arco auf Valley.

It then came to riots in the state parliament, in which Erhard Auer was shot by the left-wing extremist Alois Lindner and the Major Paul Ritter von Jahreiß (Speaker in the Bavarian Ministry of War) was killed.

On 17 March 1922, he spoke at one of Bavaria's Interior Minister Franz Xaver Schweyer convened the meeting as the sole party chairman in the state parliament against the expulsion of Adolf Hitler to Austria.

In response to the Hitler coup in 1923, Auer prompted the formation of social democratic self-protection groups, the so-called Auer-Garden, which were later transferred to the "Reichsbanner Schwarz-Rot-Gold".

In connection with the assassination attempt of Hitler on 20 July 1944, Auer, now seriously ill, was again arrested, imprisoned in the Dachau concentration camp and probably relocated to Giengen an der Brenz in Württemberg with an ambulance because of the advancing Allied troops, where he died 20 March 1945.