VW to shut down EV production in Dresden

+++ This article has been updated. Please continue reading below. +++

VW is currently building the ID.3 in the Transparent Factory. As reported by the German publication Automobilwoche with reference to company circles, vehicle production in the factory is to be discontinued completely. However, the article does not specify a time horizon. More than 150,000 units of the VW Phaeton, Bentley Flying Spur, VW e-Golf and ID.3 models have been built in Dresden since the plant went into operation in spring 2002. Last year, 6,500 ID.3s rolled off the production line there.

VW is currently making improvements in vehicle production – to put it positively. The electric car plant in Zwickau is not working to capacity and will probably not be in the near future. Volkswagen therefore announced last week that it would cut hundreds of jobs in Zwickau due to the “current market situation”. According to Automobilwoche, the Volkswagen group will also permanently cut shifts and integrate Zwickau into the group’s production organization. Currently it belongs to the independent “Volkswagen Sachsen GmbH”.

The ID.4, its coupé offshoot the ID.5, the compact ID.3, the Cupra Born and the Audi Q4 e-tron SUV and Sportback are built in Zwickau. Originally, all six models were produced exclusively there before the expansion of production took hold. Also in the direction of the “Gläserne Manufaktur” factory. The news agency DPA reported at the end of last week that despite the lack of capacity utilisation in Zwickau, VW and Audi are sticking to their 2022 expansion plans, according to which the Audi Q4 e-tron will also be produced in Brussels from the end of 2023 and the ID.3 will also be produced in Wolfsburg from autumn. The latter is to take place “initially only in small numbers”. It is highly likely that the decision to discontinue production in the Transparent Factory – should it come to pass as reported – is related to these new job creation and occupancy plans.

As early as mid-July, the German Manager Magazin reported that the recent noticeable decline in demand for electric cars was particularly explosive for Volkswagen. According to the article at the time, the order backlog for the electric car plant in Zwickau was still just under 300,000 cars at the turn of the year, but in July it had shrunk to significantly less than half that number. “We have had a strong reluctance to buy electric cars since January, regardless of the brand,” a Volkswagen Group dealer told Wirtschaftsblatt. In July it was also said that if the situation did not improve quickly, production in Zwickau would be switched from three-shift to two-shift operation.

At the end of June it was also reported that VW was temporarily reducing the production of electric cars at its plant in Emden. According to an article in the Handelsblatt also published in July, Volkswagen is struggling with demand problems for its electric models not only in Germany but in Europe as a whole.

Update 22 September 2023

Volkswagen Saxony has officially commented on the rumour that car production at the Gläserne Manufaktur, or “Transparent Factory” in Dresden, will be discontinued. Production of the ID.3 in Dresden is “still continuing”, and “no short-term adjustments are planned”, as a spokesperson explained via e-mail. And further: “Volkswagen is currently examining, with an open mind, how the location can be aligned in a sustainable and future-proof manner. To this end, the company is in talks with the employee representatives.