Volkswagen’s EV woes worsen with planned job cuts amid low demand

Volkswagen’s largest EV production site in Europe is at risk of losing jobs amid low demand. The automaker is holding a staff meeting on Thursday, where it’s expected to relay the news to workers.

The Volkswagen plant in Zwickau, Germany, is where MEB-based electric cars are built, including the ID.3, ID.4, and ID.5. Other VW brand EVs, such as the Audi Q4 e-tron and Cupra Born, are also manufactured here.

Volkswagen announced it was investing $1.29 billion (1.2 billion euros) in 2018 to transform the plant for EV production.

The plant was successfully converted from producing combustion-engine vehicles to EVs in 26 months to keep the workforce stable. Meanwhile, the competition, like Tesla and Chinese EV makers, are rapidly expanding on VW’s home turf (and abroad).

On top of this, higher inflation and less subsidies are weakening demand. According to the German newspaper Automobilwoche, Volkswagen is expected to cut jobs in response.

Volkswagen cutting jobs at Zwickau EV plant

Although Volkswagen has yet to comment on the possible job cuts, the company’s plans were leaked by Saxony Prime Minister Michael Kretschmer’s comments at an event (first reported by Bild).

Volkswagen ID.3 outside of the Zwickau plant (Source: VW)

Kretschmer said, “In the next few days, maybe even hours, we will hear unfortunate news. We were proud of what is happening in Saxony at Volkswagen with electromobility, what is going on.” Adding, “It’s not going to be that successful in the end. A whole bunch of colleagues will no longer be able to work there, at least temporarily.”

The report notes it could affect a few hundred (of the 11,000) employees at the end of October. However, this number is not confirmed.

Saxony’s Economic Minister Martin Sulig also expressed concerns: “It is a serious situation. We want to show the employees a positive perspective, but we cannot always discuss possible solutions publicly right away.”

ID.4 (left) quality control at Zwickau plant (Source: VW)

The situation has worsened, with demand slipping and a gloomy outlook. Dealers have reported declining interest in Volkswagen Passenger Car’s three MEB electric models.

Earlier today, the European Union launched a probe against Chinese EVs as imports have surged in 2023.

The investigation comes as EV makers in China, including BYD, NIO, and XPeng, are rapidly expanding their presence in the region. EU Commission President Ursula von der Leyen said the competition is unfair due to Chinese EV makers benefitting from state subsidies.

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