Volkswagen's Largest EV Plant Slows Down Again Due To Weak Demand

The situation at the Volkswagen Group's largest electric car factory in Zwickau, Germany appears to be worsening.

After numerous reports of demand issues earlier this year, Volkswagen cancelled the third shift on production line number 1, which is responsible for the Volkswagen ID.3 and Cupra Born models. The move was already expected at least since September (in October, there was a two-week halt of production) because there are not enough customers for the MEB-based hatchbacks in Europe. Previously, Volkswagen announced the end of Volkswagen ID.3 production at the Transparent Factory in Dresden, Germany (a relatively low volume, secondary production site).

This comes on top of the problems at production line number two, which is responsible for MEB-based crossover/SUVs (Volkswagen ID.4, Volkswagen ID.5, Audi Q4 e-tron, and Audi Q4 Sportback e-tron). The production of these models in Zwickau is at a complete standstill because of an insufficient supply of the all-new APP550 electric motors from the Kassel plant (210 kW motors, which replaced the older 150 kW ones). It is expected to remain that way until the beginning of December. The only good news is that the crossover/SUVs are produced at other factories (like the ID.4 in Emden, Germany).

In other words, Volkswagen Group's largest all-electric car factory, assigned to six models and with a capacity of more than 330,000 units annually, is now producing just two at a reduced volume.

According to Handelsblatt (via Electrive) the cut of the third shift is affecting jobs at the site. If the situation does not improve, then in 2024, both production lines might run on two shifts instead of the originally planned three shifts.

The factory in Zwickau produced some 218,000 electric cars in 2022, and this year will produce only slightly more – potentially 230,000, the article says.

The overall economic situation in Europe, compared with high-volume local production of the Tesla Model Y in Europe, as well as the growing import of electric cars from China, puts high pressure on established local manufacturers.

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