Volkswagen Faces Headwinds In EV Market: Emden Plant Production Reduced
A section of Volkswagen’s Emden plant in the northwest of Germany will remain closed for six weeks, according to a new report. Factory workers on the electric vehicle lines will get an extended one-month summer break, and one shift will be canceled for two weeks.
The information was provided by Manfred Wulff, Emden plant’s head of the works council, to the German Press Agency and Nordwest Zeitung (North West newspaper).
Affected models include the ID.4 electric SUV and the upcoming ID.7 electric sedan. We reviewed the ID.7 in April this year. Production of combustion-engined models, including the Passat, will remain unaffected.
Wulff also announced a reduction in the number of plant workers. 300 of the 1500 temporary workers will not have their contracts renewed in August 2023. The workforce reduction and extended holidays point to one conclusion: it’s a sales crisis.
Demand for EVs is down by 30 percent, compared to original production figures. Moreover, potential EV buyers are showing signs of reluctance, Wulff told Nordwest Zeitung. Production of the ID.7, originally slated for July 2023, has been pushed back to later this year.
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Olaf Lies, the minister of economic affairs for the state of Lower Saxony, told the newspaper that Volkswagen’s decisions in Emden were “understandable.” To counter the sales slump, he called for a reduction in value-added tax (VAT) and additional EV incentives.
Volkswagen Group sales were up by 68 percent in Europe in Q1 2023 year over year, while US sales increased by a remarkable 98 percent. However, China sales were down by a worrying 25 percent, as it is VW Group’s largest market, and also the biggest plug-in car market by volume in the world.
Volkswagen announced last year that it had planned to invest nearly $1.1 billion in converting and retooling the Emden plant for MEB platform-based electric cars. It employs 8,000 workers at the facility.
The brand makes electric cars at multiple sites across the globe, four of which are in Germany: Emden, Hanover, Dresden, and Zwickau. Its international EV plants, where primarily the popular ID.4 is made, are located in the cities of Anting and Foshan in China, and Chattanooga, Tennessee in the US.
