Volkswagen is reducing its electric vehicle (EV) production in Europe as demand has not met expectations. Representatives from Volkswagen’s factories in Germany confirmed to Automotive News and Bloomberg that production pauses are set to begin. Specifically, the Zwickau plant will halt operations for a week starting on October 6, 2023, primarily due to low demand for the Audi Q4 e-tron in the United States, exacerbated by tariffs.
The Zwickau factory, which also manufactures the Volkswagen ID.4 and ID.5 SUVs, along with the ID.3 and Cupra Born hatchbacks, is facing significant production adjustments. Additionally, the Dresden “Transparent Factory” will also suspend production during the first week of the October autumn holidays. A spokesperson stated that this pause is part of the company’s efforts to adjust its production schedule to reflect the current market situation.
The Emden factory, responsible for producing the ID.4 SUV and the ID.7 sedan and wagon, has already reduced worker hours and is planning further shutdowns. Volkswagen Commercial’s Hanover factory will also cease production during the autumn holidays, impacting the ‘T7’ Multivan and ID. Buzz models.
Despite these production cuts, Volkswagen remains a dominant player in the European EV market. Data from Dataforce, as reported by Automotive News, shows that Volkswagen sold 16,105 electric vehicles in August 2023, leading the sector with a notable 45 percent increase compared to the previous year. This figure positions Volkswagen ahead of Tesla, which sold 14,345 EVs, down 23 percent, and BMW, which sold 12,546, marking a 7 percent rise.
The top ten EV brands in Europe for August include Skoda with 11,223 sales, Audi with 9,564, Hyundai with 8,229, Mercedes-Benz with 8,207, Renault with 7,501, Ford with 6,619, and BYD with 6,465. All brands, apart from Mercedes-Benz, recorded substantial sales increases ranging from 54 percent to 123 percent year-on-year.
While Volkswagen leads in overall sales, the Tesla Model Y remains the best-selling EV model in Europe for 2023, with 84,314 units sold, despite a significant decline of 34 percent. The Volkswagen ID.4 follows with 51,380 units sold, reflecting a 33.6 percent increase. The Tesla Model 3, with 50,237 sales, rounds out the top three, although it also experienced a drop of 29 percent.
The broader EV market in Europe has seen a growth of 26 percent in August compared to the same month in 2022, according to Dataforce. Despite these positive overall figures, Volkswagen’s dedicated EV factories are currently operating well below their capacity, as the anticipated surge in electric car demand has not materialized as expected. This situation has prompted many manufacturers to reassess their EV production plans and consider a return to developing petrol and plug-in hybrid models.
Notable recent shifts in strategy include Porsche reintroducing petrol engines for the new Boxster, Bentley approving a new generation of the Flying Spur and Continental models, and Volvo moving forward with a third-generation XC90. These decisions highlight the ongoing challenges facing the electric vehicle sector amid fluctuating consumer demand.
