Following a smaller than anticipated demand for its EVs built near its Emden facility in Northern Germany, Volkswagen is reducing its production output and giving its EV employees an extended vacation… some of those breaks will be permanent.
Volkswagen Group continues to look toward electrification as a means to gain a bigger piece of the global market share, and it has certainly come with its ups and downs. At the end of Q1 2023, the Group’s volume division saw sales climb and BEV deliveries rise 50% compared to a year prior.
The company has already doubled down on its EV strategy this year, pumping billions more into its global transition, while introducing smaller and more affordable EVs to various markets. However, laggard software development has stymied the automaker’s progress, causing the Group to… regroup and pivot its business strategy toward optimization and cashflow. It’s about the long game after all.
Part of Volkswagen’s leaning down process includes optimized EV production, and if the demand isn’t there, there’s not much incentive to keep building vehicles at the rate they’re currently at… at least in Northern Germany this summer.
Volkswagen slows EV production temporarily (it hopes)
According to the work council at Volkswagen’s Emden factory, as cited by German newspaper Nordwest-Zeitung, the automaker is cutting the production output of its EVs the next two weeks – more specifically, the ID.4 and new ID.7 sedan.
The head of the work council told the German media outlet that demand for EVs built at the Emden plant is almost 30% lower than Volkswagen’s original production figures anticipated. The automaker cited reduced and halted subsidies in EU countries like Germany, Sweden, and France as a contributor to the less than stellar demand overseas.
The Emden plant already had a three-week summer vacation scheduled, but Volkswagen has added an additional week off for those employees working on the EV production lines. Additionally, the automaker says approximately 300 of the 1,500 temporary workers currently employed at Emden will be laid off come August. The work council says production of the combustion model Passat will continue at Emden as usual.
Although Volkswagen Group is forecasting leveled, or at best, modest EV growth in the EU this year, it remains optimistic that demand will pick back up. A spokesperson for VW shared the following with Nordwest-Zeitung:
We are confident that capacity utilization at the plant will increase again with the market launch of the ID7 at the end of the year.
Volkswagen Group still has dozens of other facilities around the globe, developing and producing electric vehicles.