Volkswagen Cuts Production of EVs at German Plants due to Low Demand and U.S. Tariffs

• The Emden and Zwickau plants are most affected.

• These factories make models such as the ID.4, ID.7, and Audi Q4 e-Tron.

• VW Group’s EV sales are still growing, but slower than expected.

Days after Stellantis announced it would cut production at six of its European factories, Volkswagen Group has made public similar plans.

Indeed, the German auto group, which includes the Volkswagen, Audi, Porsche, Seat, and Skoda brands, among others, says it will temporarily pause or slow down production at 5 factories in its home country.

The main reasons behind this are slower than expected demand for electric vehicles globally, increased competition from Chinese automakers in Europe and China, as well as the U.S tariffs, which make it less profitable to sell imported cars in the United States.

While demand for its electric models is lower than it had planned for, VW Group’s EV sales are still increasing, with the Volkswagen brand alone selling more electric vehicles than anyone else in Europe in August.

Therefore, the problem stems more from excess production capacity than an actual lack of sales.

To help remedy this and lower existing inventories in the short term, the company will temporarily stop or slow down many of its assembly lines in Germany.

In the long term, the automaker wants to reduce its German production capacity by more than 700,000 units and cut 35,000 jobs by the end of the decade.

The Zwickau plant, which manufactures the Audi Q4 e-Tron for both Europe and North America, as well as the Europe-only ID.3 and Cupra Born, has been hit particularly hard since the Audi crossover is subject to 15% tariffs when entering the United States, one of its main markets.

This factory will be idled for a week, starting on October 6.

In addition, production of the sub-compact ID.3 and Cupra Born hatchbacks will move to Wolfsburg in the next two or three years. Despite this, agreements between VW Group and the German government mean that jobs at Zwickau will be safe, just as they will be in Emden.

Speaking of which, Emden will also be paused for a few days, despite having already cut back employee hours. The European-market ID.4 and the ID.7 sedan are manufactured there.

VW’s unique Dresden factory, which previously built the Phaeton luxury sedan along with a few Bentley Continental Flying Spur models, now serves as the automaker’s European delivery center as well as a production site for a comparatively small number of ID.3s. Despite its special status among the company’s manufacturing facilities, the Dresden Transparent Factory has not escaped cuts, with production being put on hold during the first week of autumn holidays in October.

Simultaneously, the VW plant in Hanover, which makes the gasoline-powered T7 Multivan in addition to the European-market ID.Buzz electric minivan, will take a five day pause.

Lastly, the automaker’s Osnabrueck facility will close for a week in October in addition to having already shortened each work week by a day until the end of the year.

This factory’s future is still undecided, as the gas-powered Porsche 718 Boxster and Cayman, as well as the Volkswagen T-Roc Cabriolet, a quirky convertible sub-compact SUV, will end production in the coming months.

Source: Automotive News