In what’s beginning to sound like a broken record, Volkswagen is cutting EV production over slowing demand for its electric models. Volkswagen’s EV woes worsen as the automaker struggles to keep up with Tesla.
Although Volkswagen delivered 531,500 electric vehicles through September, up 45% from last year, the number fails to show the current situation.
Arno Antilitz, Volkswagen’s CFO, explained on a media call last month that EV orders are down to 150,000 in Europe. That’s 50% lower than the 300,000 from last year.
In September, the automaker said it would reduce staff at its Zwickau plant in Germany, its largest EV production site in Europe. Volkswagen announced at a team meeting it would cut 269 temp jobs at the facility, where EVs, including the ID.3, ID.4, ID.5, Audi Q4 e-tron, and Cupra Born are made.
A week later, a report from the German newspaper Automobilwoche claimed VW planned to end ID.3 production at its Dresden plant.
The report noted falling demand, rising inflation, and an end to subsidies as reasons behind the move.
Volkswagen’s EV woes worsen (again)
According to a new report from Automobilwoche, Volkswagen’s EV woes have worsened. The automaker is now cutting the number of shifts in Zwickau.
Volkswagen is now running a two-shift operation in Hall 5, down from three. The VW ID.3 and Cupra Born are both made there. A company spokesperson said, “The decision ensures productive operations and the future viability of the site.”
However, according to the source, the ID.3 and Cupra born were not initially impacted. Slowing demand for Volkswagen EVs has led to the nonrenewal of many temp employee contracts.
Zwickau is Volkswagen’s largest EV production site in Europe. The company invested $1.3B into the plant in 2018 to prepare the facility to build EVs.
Volkswagen has struggled to keep up with Tesla and other EV leaders. In addition, the end of EV subsidies in Germany, combined with higher interest rates and inflation, is pressuring the market.
Europe was Volkswagen’s largest EV market by far, accounting for over 341,000 (64%) of total electric models sold through September.
A 50% drop in orders is alarming. Volkswagen is struggling to keep up with Tesla, with its Model Y topping the sales charts.
Meanwhile, Volkswagen is delaying plans for a fourth EV battery plant. CEO Oliver Blume said the decision was due to market conditions in Europe, “including the sluggish ramp-up of the BEV market in Europe.”
Volkswagen is facing increasing pressure from EV market leaders like Tesla and BYD, which have drastically lowered prices to squeeze out the competition.
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