Volkswagen Cutting EV Production Due To Slow Sales

Volkswagen has announced a temporary suspension of production for its ID.3 and Cupra Born electric cars at its Zwickau and Dresden facilities in Germany for the first two weeks of October, according to Reuters.

The company blames lower-than-expected demand for the shutdown but has not said how many workers would be affected. As of 2022, the two plants employ over 11,000 people and produce vehicles like the ID.4, ID.5, and Q4 e-tron, in addition to the small EVs mentioned earlier.

Production will be suspended on 2 October at both plants before resuming on October 13th at Zwickau and October 16th at Dresden. The company cites increased competition from the likes of Tesla and other Chinese EV companies, as well as high inflation and lower subsidies for the decrease in demand.

In the past, the company has suspended production at plants due to supply chain shortages like many others, but this is the first time in a while we've heard that a lack of sales is the culprit (especially regarding an EV.)

The ID.3 is an excellentlittle car that has been improved over time, but in a market flooded with electric vehicles, you need to be exceptional.

The influx of cheaper alternatives from China appears to be the root cause of the problem. Earlier this year, Ford even admitted that China is winning the EV race. As a result, The European Commission has launched an investigation to determine whether tariffs should be imposed to protect European manufacturers from an influx of cheaper Chinese-built EVs benefitting from subsidies.

It's much too early to say how these planned shutdowns will affect the plants in the long term. The European Union has stringent labor laws, so the situation can't be compared to the ongoing UAW strike in America. But Volkswagen is building an all-new plant for Scout in South Carolina.

Volkswagen is likely hoping for the EU to take action against Chinese imports. Chinese EVs are approximately 20% cheaper than their European-made contemporaries, and that's before you deduct state subsidies. The future looks bleak, but at least VW has the new ID. 4all in the pipeline, which will hopefully be priced closer to its Chinese rivals.