Volkswagen stops production: E-car demand breaks!

Volkswagen stops production: E-car demand breaks!

Volkswagen is currently under pressure, because in several German works the production is temporarily stopped due to a lack of demand for electric cars. Renowned locations such as Zwickau, Dresden, Emden, Hanover and Osnabrück are affected. In Zwickau, the production of ID.3 and the Cupra Born will be discontinued for several days from October 6th. The glass manufactory in Dresden also takes a break. In Emden, closing times are planned for the production of ID.7; Talks with the works council are still running here. In Hanover there are five days of standstill for the production of ID.Buzz and Multivan T7 during the autumn holidays. Osnabrück reduced production by at least one day a week by the end of the year, with a full week in October. These measures are a direct result of the overcrowded camps and empty order books-a clear response to the weak demand in the e-car market, as https://www.investmentweek.com/stalk-volkswagen-legt-werke-in-deutschland-lahm/).

But why this sudden withdrawal? One reason lies in the export markets, particularly in the USA, where demand is weak. An additional US tariff surcharge on the Audi Q4 e-tron worsens the situation. This shows that the initial euphoria for electric cars is giving way to sobering realism. Volkswagen is not only fighting against persistently weak demand for the new ID models, but also has to deal with structural problems, including delays in software and negative effects on the group result from the weak subsidiary Porsche. All of this is putting additional pressure on Volkswagen's share prices, while competitor BMW is convincing investors with solid figures.

A look at the production numbers

The current situation is in contrast to the production figures of previous years. According to the Association of the Automotive Industry (VDA), 1.35 million electric cars were produced in Germany in 2023 and thus an increase of 7 % compared to the previous year. The battery -electric vehicles (BEVS) accounted for 1.06 million units, which corresponds to an increase of 11 %. For 2024, a further increase in e-car production is forecast by 24 % to 1.67 million units, as reported in [world.

Nevertheless, current figures from the approvals show a mixed balance. In January 2024 there were a total of 207,600 new cars in Germany, which corresponds to a decline of 3 %. However, there is no longer a quarter of these new registrations on electric vehicles, whereby the electric bestseller with 52,220 new registrations, an increase of 42 % compared to the previous year, stand out. The neutral view of the numbers makes it clear that the industry faces major challenges.

Conclusion and outlook

The simultaneous production stops at Volkswagen are a strong signal to the entire automotive industry. The transition phase to electromobility involves many hurdles that need to be overcome. While some plants are reducing production due to weak demand, there is still a lot of activity in Wolfsburg, as special shifts are planned for the production of classic combustion engine models. This is also reflected in the fact that additional shifts will be carried out in Wolfsburg almost every weekend until Christmas in order to meet the ongoing demand for models such as the Golf and Tiguan, as Tagesschau reports.