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Volkswagen is cutting back planned staffing at its all-electric plant in Zwickau, Germany and adjusting shift work due to “market conditions.”
The factory is VW Group’s largest EV plant in Europe with an annual production capacity of 300,000 vehicles. It builds full-electric cars on the automaker’s MEB platform including the VW ID3, Audi Q4 e-tron and Cupra Born, as well as bodies for Bentley and Lamborghini.
VW had planned to give permanent employment to 540 staff hired in recent years on limited contracts but says it is no longer able to do so for 269 of those staff.
“Volkswagen continues to be 100 percent convinced of the path to electromobility … however, in light of the current market conditions we can not extend 269 contracts which will run out shortly after a 12-month duration,” a company spokesperson said on Thursday.
VW is having a tough time selling enough mostly made-in-Germany electric cars to challenge Tesla’s global dominance.
Lackluster economic growth as well as higher energy, living and borrowing costs in Europe have weighed on demand for its ID fleet of EVs.
Orders from corporate clients — which account for around 70 percent of the IDs built at the plant — have been plummeting since a federal subsidy for battery-powered company vehicles expired this month, a source said.
About 10,700 staff work at the Zwickau plant, where VW has spent 1.2 billion euros ($1.29 billion) converting the production lines to electric vehicle production.
VW is now facing increasing competition from other manufactures such as Tesla and a growing array of Chinese automakers, as well as dampened demand in the European EV market due to high inflation and cuts to subsidies.
VW is following Tesla, BMW and others in exporting an EV from lower-cost China to Europe. Its Cupra brand has announced plans to produce the Tavascan SUV at a factory in Anhui. Built on the same hardware and software platforms as the ID series, the model is due to hit the European market in 2024.
The decision comes just three months after production cuts and layoffs at the carmaker’s Emden plant.
AutoNews Europe,
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@kezo – and that’s in addition to the enforced four week shutdown they had over summer at the Emden factory!
I guess the question is, are other EV manufacturers seeing this downturn or has the poor reviews of the ID models started to bite?
“You can please some of the people all of the time, you can please all of the people some of the time, but you can’t please all of the people all of the time”
@Superjon – From what I’ve read EV sales have slowed in the second half of the year as expected but not ground to such a halt VW have however it seems VW has struggled with id more than most. I onder why!
Moving production to China and exporting them back to Europe as it seems several EU manufacturers are now doing, I don’t think will help VW’s id label when there are much nicer looking Chinese cars coming to Europe irrespective of whether tariffs will be added to them.
Lots of coverage in the media at the moment about prices and profitability of EV batteries such as this Electric vehicle battery cost officially dips under critical $100/kWh price point but there’s a catch | Electrek – cost of batteries to manufacturers is coming down and not far from allowing them to sell EV and ICE models at the same price. The catch though is that Chinese manufacturers and established EV brands are already switching to new battery technology leaving the traditional ICE brands with old tech on which they have low profit margins. What might all that mean for us Motability customers I wonder. Good deals on EVs from traditional makers as they look to offload stock which will date rapidly. Or very bad deals while they try to hold on to some level of profit from the stock they have already invested in. Looking at APs today I’d say a bit of both. The recent AP drops on the ID4, BMW and Enyak look like good deals today but may turn out not to be such a bargain in a year when models with longer range are £5k or more cheaper in the showroom than they are today. For me things are moving to fast to consider blowing £5k plus on an AP because it is very likely there will be better range and prices in 1 or 2 or 3 years time. Will I listen to myself and extend my lease if there’s what looks like a bargain on something new and shiny with lots of toys when I can re-order at the end of October though? No, of course it won’t..
{Lackluster economic growth as well as higher energy, living and borrowing costs in Europe have weighed on demand for its ID fleet of EVs.}
Even now VW poor managment fails to address the real reasons for its woes
Huge debts that need paying back (Current Volkswagen Total Debt
123.89 B ) and also its poor car techNot to mention lack of brand trust from 11 million owners following “Dieselgate” and “Emissionsgate which equates to approx 25 pc of total above debt
Germanys economy which is now in recession relies heavily on this one
manufacturer
Volkswagen is the biggest of Germany’s car makers and one of the country’s largest employers, with more than 270,000 jobs in its home country and even more working for suppliers
Not surprised if we see more troubles ahead
problem with that though is they then cant export them to the uk without a 10% tariff for not being 65% eu or uk parts car as agreed in the tca and the beloved eu dont want to extend the dealine for it lol
problem with that though is they then cant export them to the uk without a 10% tariff for not being 65% eu or uk parts car as agreed in the tca and the beloved eu dont want to extend the dealine for it lol
The large majority of EU EV manufacturers have openly said that they won’t meet the 40% origin and themselves calling for delays. I can’t see the EU going ahead with something that their own can’t meet!
Even if this was the case its still probably cheaper for them to Manufacurer in China, that 10% will be neither or there lol.
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