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Volkswagen will cut production of its electric ID.4 compact SUV and ID.7 sedan at its Emden plant in Lower Saxony in the next two weeks, according to a report in the German media Nordwest-Zeitung.

The report said the main reason for the production cuts was weak model sales, demand was nearly 30% lower than planned production, so Volkswagen is suspending the late shift assembly of these two models. At the same time, the holiday of employees responsible for electric vehicle production in the factory will be extended by one week from the original three weeks. The extension of factory holiday is mainly to adjust the electric vehicle output of the factory. It is expected that the total production reduction of the production line will reach 6 weeks. However, only ID.4 and ID.7 models will be affected by this reduction, and Passat internal combustion engine models produced in the factory will not be affected.

Founded in 1938 and headquartered in Wolfsburg, Germany, Volkswagen Group is the largest automobile company in Europe and one of the first foreign automobile enterprises to enter the Chinese automobile market. It owns many well-known brands such as Volkswagen, Audi, Skoda, Porsche, etc., and has invested in joint ventures including FAW-Volkswagen, SAIC Volkswagen, Volkswagen Anhui, etc. in China.

The Emden plant is one of four Volkswagen plants currently producing electric vehicles in Germany, the other three being in Zwickau, Hanover and Dresden. In 2020, Volkswagen announced an investment of 1 billion euros (7.925 billion yuan) to upgrade the Emden plant, and two years later, in 2022, the plant began producing electric vehicles, and ID.4 was the first electric vehicle produced at the plant. About 300 of the 1500 temporary workers at the Emden plant will not renew their contracts in August, and production of the new ID.7 was scheduled to begin in July. In April this year, ID.7 was officially unveiled, based on Volkswagen MEB pure electric platform, which is another global model that will be launched simultaneously in China, Europe and the United States after ID.4.

VW ID.7 Declaration Drawing

Although Volkswagen Group is a relatively active brand in the electric transformation of multinational automobile enterprises, from the sales volume point of view, compared with the current main electric brands, Volkswagen sales are not optimistic. According to the data, the cumulative global sales volume of Volkswagen in 2022 was 4.56 million vehicles, of which 330,000 electric vehicles were delivered, up 23.6% year-on-year. By contrast, Tesla sold 1.3143 million vehicles worldwide in 2022, including 439,000 in China, while BYD sold 1.8635 million vehicles.

Volkswagen decided to cut production of two models, the electric ID.4 compact SUV and the ID.7 sedan, due to sluggish sales of both models. It should be noted that Volkswagen ID.4 is the group's best-selling electric vehicle, with cumulative sales of 175,600 vehicles in 2022, and the European market is also its largest pure electric vehicle market. Data show that from January to March 2023, Volkswagen's cumulative sales of pure electric cars rose 42% year-on-year to 141,000 units, accounting for 6.9% of the company's total deliveries, compared with 5.2% in the same period last year.

Previously, Volkswagen Group had said that its phased goal was to achieve an annual output of 1 million electric vehicles by 2023. From the data analysis, Volkswagen Group still has a certain distance from this goal. According to the plan, in the European market, Volkswagen brand pure electric vehicle sales will account for 75% of total sales by 2030, and only electric vehicles will be produced by 2033; at the same time, in the US and China markets, pure electric vehicle sales will account for more than 50% by 2030. In addition, Volkswagen said it would launch 10 new electric models by 2026, covering all market segments.

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