For the second time this week, Volkswagen is halting production of some of its most popular electric cars. VW extended its production pause to a second plant in Germany, impacting the ID.4 and ID.7.
Production lines at Volkswagen’s recently upgraded Emden plant in Germany were at a standstill Thursday.
The news comes amid a lack of electric motors for the ID.4 and ID.7 models, a spokesperson told German press agency dpa.
Volkswagen plans to extend the production stop into Friday and Monday. Emden is Europe’s third-largest auto distribution hub, producing models such as the Passat, Alltrack, Atreon, and GTE.
The automaker announced last year that it will invest around $1.1 billion (1 billion euros) to advance EV production at the site.
Volkswagen’s ID.4 was the first electric vehicle to roll off the assembly line at Emden last May. Following its Zwickau site, it marked the second plant in Germany to begin building EVs.
Production of the flagship ID.7 began at Emden in August as the second EV to be built at the site.
Despite the massive investments, slowing demand caused Volkswagen to reduce EV output at the plant this summer.
Volkswagen production cut over e-motors or demand?
VW has cut EV production at several German plants over the past few months. Higher inflation and interest rates, fewer subsidies, and more competition have slowed orders.
Earlier this week, Volkswagen said it was halting production at its Zwickau factory for around three weeks. A spokesperson said, “The production of e-drives at the Volkswagen Group Components site in Kassel is currently only possible to a limited extent.”
According to the source, the stoppage will impact the VW ID.4, ID.5, and Audi Q4 e-tron. The ID.3 and Cupra Born will not be affected.
VW already planned to shut down a production line at the plant over the holidays, citing low demand.
Due to waning orders, the automaker cut around 300 employees from its Dresden plant toward the end of October. The site also halted ID.3 production earlier this year.
They say there are two sides to every story. Is Volkswagen pausing production due to a lack of electric motors? Or is demand slipping?
Volkswagen’s CFO, Arno Antilitz, said orders for electric cars were down to 150,000 in the third quarter. That’s 50% lower than last year’s 300,000 orders.
Europe was by far VW’s largest EV market, accounting for 61% of all-electric models sold through September. China was second.
Although sales were up 4% in China, Antilitz warned the company could lose market share until new models with XPeng begin rolling out. Volkswagen has already drastically slashed prices to keep up in China, its largest market by profits.
Meanwhile, head of strategy at VW Group America, Reinhardt Fischer, said the automaker is “not scaling back plans for EVs in the US.” Fischer added VW aims to launch an EV under $35,000 in the US.
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