Volkswagen AG (VWAGY.US) is reducing production and temporarily shutting down two of its German manufacturing facilities as electric vehicle demand growth falls short of expectations.
The company's Zwickau plant will suspend operations for one week starting October 6th due to weak demand for the Audi Q4 e-tron. This model has been impacted by U.S. tariffs and Germany's relaxation of restrictions on new internal combustion engine vehicle sales.
According to sources familiar with the matter, the Emden facility, which produces Volkswagen's ID.4 and ID.7 models, has already reduced employee working hours and is expected to shut down production lines for several days.
Both plants specialize exclusively in electric vehicle production, making them particularly vulnerable to fluctuations in EV demand. While Volkswagen has benefited from growing electric vehicle sales in Europe, the region's overall growth has been slower and more uneven than initially anticipated.
Volkswagen is also grappling with overcapacity challenges. These two facilities are part of a major restructuring agreement reached by the company last year, under which union leaders agreed to reduce factory costs and eliminate 35,000 jobs by 2030 to prevent plant closures. The agreement ensures job security at both the Emden plant on Germany's northern coast and the Zwickau facility in eastern Germany.
Comments