Volkswagen has halted production of several of its most popular electric vehicles for the second time this week due to ongoing supply chain disruptions. Volkswagen has extended its production halt to another German plant, affecting output of both the ID.4 and ID.7 models.
Production remained halted at Volkswagen’s newly revamped Emden facility in Germany on Thursday.
A shortage of electrical motors affects production of ID.4 and ID.7 models, according to a spokesperson who spoke with a German news outlet.
Volkswagen plans to extend its manufacturing schedule through Fridays and Mondays. Emden, a significant player in the European automotive sector, boasts the distinction of being the continent’s third-largest auto distribution hub. Notably, it is home to the production of several renowned vehicle models, including the Passat, Alltrack, Arteon, and GTE.
The automaker announced last year that it would invest approximately $1.1 billion (1 billion euros) to accelerate electric vehicle production at its site.
Volkswagen’s ID.4 marked a milestone by being the first fully electric vehicle to roll off the assembly line at its Emden plant in late May. Following the launch of its Zwickau website, the company marked the second plant in Germany to commence constructing electric vehicles (EVs).
The manufacturing of Volkswagen’s flagship ID.7 began at its Emden plant in August, marking the site’s second electric vehicle (EV) production facility.
Despite significant investments, slowing demand prompted Volkswagen to reduce its electric vehicle production at the facility this summer.
Is Volkswagen’s manufacturing strategy focused on minimizing costs through economies of scale with electric motors or driven by market demand for sustainable transportation options?
Volkswagen has reduced EV production at several German plants over the past few months. Higher inflation and rising interest rates, reduced government support, and increased market competition have both dampened demand and curtailed new orders.
Volkswagen announced a three-week shutdown of production at its Zwickau manufacturing plant, effective immediately. As of now, the production of e-drives is available in limited quantities on the Volkswagen Group Parts website based in Kassel.
The planned supply shortage is expected to impact production of the VW ID.4, ID.5, and Audi e-tron models this fall. The ID.3 and Cupra Born will not be impacted by these changes.
Volkswagen has deliberately decided to shut down one of its manufacturing lines during the vacation period, attributing the move to sluggish demand.
As a result of declining demand, the automaker plans to reduce its workforce by approximately 300 employees at its Dresden plant by the end of October. The production of ID.3 was temporarily suspended by the location earlier this year.
Electrek’s Take
The age-old adage that every narrative has its dual perspective: two sides to each story. Volkswagen is temporarily halting production at several plants worldwide due to a shortage of electric motor components, rather than an absolute absence. Or is demand slipping?
Volkswagen’s Chief Financial Officer, Arno Antlitiz, reported that electric vehicle orders plummeted to 150,000 in the third quarter. Last year’s order total was 300,000; this year’s is a significant 150,000 units lower at 150,000.
In Europe, Volkswagen’s electric vehicle sales were dominated by the region, which accounted for a substantial 61% of all-electric purchases made by September. China was second.
Despite a 4% surge in gross sales in China, Antilitz cautioned that the company may surrender market share until XPeng’s innovative designs become available to the masses. Volkswagen has significantly reduced costs to remain competitive in China, its most lucrative market by revenue.
Meanwhile, VW Group America’s Head of Technique, Reinhardt Fischer, confirmed that the automaker is not revising its plans for electric vehicles (EVs) in the US market. Fischer emphasized Volkswagen’s objective to introduce an EV priced under $35,000 in the American market.
