(CTN News) – In the middle of several reports that Volkswagen is cutting EV production at two German plant sites, the automaker has revealed the reason – the slowing demand for the vehicles.
Germany’s Volkswagen suspends EV production
According to a report in the German newspaper Automobilwoche last week, Volkswagen has decided to halt the production of its electric vehicles at its Dresden facility in Germany.
It has been reported that Volkswagen’s Dresden plant has produced over 150,000 Phaetons, e-Golfs, ID.3s, and Bentley Flying Spurs since it started production in 2002. There were 6,500 ID.3 electric vehicles built at this location during last year’s production.
It has been reported first by Germany’s DPA news agency that the automaker is temporarily suspending production of the ID.3 at the plant for two weeks during the Saxon autumn holidays. There will be a regular single-shift operation of the electric car production starting on October 16.
As a result, Dresden’s roughly 300 employees are being reassigned to other areas, such as “innovative manufacturing and testing.”
A spokesperson for main BEV plant in Zwichau has said that one of the two production lines will be shut down during the holidays due to maintenance (via Automobilwoche).
Earlier this month, VW announced at a staff meeting that it would be laying off 269 temporary workers at the site at the end of the month.
Volkswagen’s ID.3 and Cupra Born models will be affected by the production halt, but the ID.4, ID.5, Audi Q4 e-tron, and Audi Q4 sportback e-tron models will continue to be produced in three shifts as normal.
The Zwickau plant is in the process of negotiating with local labor representatives on how to proceed with EV production.
It was not specified by the company how many units or employees would be affected by the changes.
Due to higher inflation and a reduction in the level of subsidies in Europe, Volkswagen is struggling to attract new EV orders. There is also a growing threat coming from the EV competition, such as Tesla and BYD, which are more advanced than Europe’s largest automaker.
Electrek’s take on the story can be found here
At home and abroad, cheaper and more advanced electric vehicles are taking market share from Volkswagen’s core brand.
This year, Volkswagen was surpassed by BYD as the most popular brand in Volkswagen’s largest market by revenue (China).
As a result of slowing demand in the region, VW has reduced the prices of ID.3 and ID.4. Will VW be able to maintain this price reduction for a considerable period of time?
In the next three years, Volkswagen Group CEO Oliver Blume hopes to increase VW brand returns to 6.5%. Currently, they are around 3.6%.
As EV manufacturers such as Tesla, BYD, and several other Chinese start-ups continue to expand rapidly, Volkswagen must act urgently to avoid falling further behind.