Volkswagen to cut electric car production in Germany as demand slumps

Volkswagen, the UK’s most popular car brand for the past two years, is cutting production of electric vehicles (EV) due to declining consumer demand.

In what has been called an “unprecedented move,” the German car giant is planning to scale back EV output at one of its largest production facilities in Emden, northwest Germany, due to “strong customer reluctance” to buy battery-powered models.

The move comes after company executives said demand for Volkswagen’s all-electric cars is down 30 percent compared to forecasts.

Gasoline and diesel car production would not be affected, the Time.

According to the company’s works council, an electric vehicle-only shift at the factory in Lower Saxony has been canceled for the next two weeks and will be followed by an extended four-week summer holiday running from July to August.

The Times also reports that due to a ‘sales crisis’ for electric cars, Volkswagen will not renew the contracts of 300 of the 1,500 temporary employees working on electric cars at the Emden plant.

Manfred Wulff, the head of the Emden plant, told the German news agency: “We are experiencing strong reluctance from customers in the electric vehicle sector.”

Volkswagen is one of the mainstream car brands that has ramped up EV availability the fastest, largely due to green strategies put in place in the wake of the 2015 diesel emissions cheating scandal.

Production of the latest model, the ID.7 sedan, was due to start at the factory in July, but has now been postponed to later in the year.

The decision will also reduce production of the ID.4 SUV, which is also built at the same plant.

Volkswagen has been Britain’s most popular new car brand for the past two consecutive years.

A whopping 131,850 newly registered vehicles in 2022 confirmed their place at number one – ahead of Ford.

The German giant has set a target that four out of five new models sold will be fully electric models by the end of the decade.

However, it seems that a slump in demand for its EVs – and electric cars in general – has recently prompted the move to adjust shifts on the assembly line.

It comes as consumers in Britain continue to struggle with the concept of battery-powered car ownership, with major concerns about the high price of electric cars, the cost of charging them and a lack of public charging infrastructure.

A drop in EV appetite is also accompanied by rising energy costs and falling petrol and diesel prices.

A Volkswagen UK spokesperson told This is Money: ‘The Volkswagen brand, like other car manufacturers, is currently seeing a decreasing demand for electric cars. Reasons for this include: reduced subsidies, higher inflation and recently longer delivery times due to parts shortages. We are convinced that demand for fully electric cars will pick up again in the course of the year.

“With the thoroughly revised ID.3 and the new ID.7, we continue to launch attractive new models.

“In the UK, delivery times for customers placing a factory order are now only around 12 to 15 weeks due to significantly improved parts availability.

“Customers are also encouraged to talk to their Volkswagen dealer for more information, as vehicles may be available from stock even faster.”

Volkswagen recently gave the world its first glimpse of what an “affordable” battery-powered supermini will look like in three years.

The ID.2all concept was unveiled in Germany in March as a preview for its forthcoming ID.2 crossover, with the manufacturer claiming it will cost less than all existing rivals when it hits showrooms in 2026.

Likely to be a replacement or electric alternative to the Polo supermini – which currently starts from £19,500 for the cheapest petrol version – Volkswagen bosses say the new EV will have a range of 450 miles and a top speed of 100 mph.

The cheapest version of the new compact crossover will cost no more than €25,000 – around £22,000 – when it finally hits the market in less than three years.

Rumors have it that the German brand is developing an even smaller EV model – likely to replace the Up! city ​​car – which he hopes can hit the market starting at less than €20,000, which would work out at around £17,500 in the UK.

The push to offer more affordable electric cars comes after Volkswagen announced in April that the current Golf Mk8 hatchback will be the last with a petrol engine.

The car, which has been a best-seller in the UK and Europe for decades, will receive a facelift in 2024, but will not be replaced by an internal combustion engine Mk9 model.