Volkswagen’s plant in Dresden, Germany, which has been responsible for producing thousands of ID.3 electric models, may see production come to a halt, according to a recent report. The facility, which began production in 2002, has been instrumental in building over 150,000 Phaeton, Bentley Flying Spur, VW e-Golf, and ID.3 models throughout the years.
While the plant is expected to be retained in some capacity, the approximately 300 full-time workers will be reassigned to other areas within the company. The fate of the 2,000 additional temporary staff members, however, remains uncertain.
The decision to pause ID.3 production in Dresden is likely part of a broader cost-cutting strategy for Volkswagen as it seeks to position itself for future competition. The annual operating costs for the facility amount to approximately €60 million to €70 million. By ending ID.3 production, the company could save around €20 million.
This news comes amidst other workforce reductions at Volkswagen, with 269 temporary jobs being cut at the Zwickau plant where various electric vehicle models are produced. According to reports, factors such as a lack of orders, higher inflation, and smaller subsidies are impacting the demand for Volkswagen’s electric vehicles.
Volkswagen’s leadership, including CEO Oliver Blume, is focused on improving profitability and positioning the company for success. The goal is to boost the VW brand returns to 6.5% by 2026, which would translate to approximately €10 billion in profits. With competition from Tesla, BYD, and other Chinese electric vehicle manufacturers on the rise, Volkswagen recognizes the need to adapt and become more profitable in order to stay competitive in the market.
Source: Automobiliwoche, Bloomberg
Note: The original article contained a photograph of Volkswagen ID.3 production in Dresden which has been omitted in this article.