Volkswagen is contemplating stopping electric car production at its Dresden plant, as part of its efforts to reduce costs and increase the profitability of the brand. Despite investing billions of euros in adapting and modernizing its factories, the acceptance of Volkswagen’s electric vehicles has not met expectations.
The Dresden plant, also known as the Transparent Factory, was inaugurated in 2022 and is exclusively dedicated to the production of electric cars. However, production at this plant is low compared to other Volkswagen plants, with only 6,500 vehicles assembled last year. The lack of a body shop and paint shop has led to the decision to cease the construction of the ID.3 model in Dresden and relocate all production to Zwickau.
Despite this change, the 300 workers at the Dresden plant will not be laid off and will be assigned other tasks, such as conducting innovative tests. This measure is part of Volkswagen’s efforts to increase its profit margin from 3.6% to 6.5% for each car sold.
The German government has expressed concern about the state of Volkswagen, as the automotive industry represents an important part of the country’s value creation. Volkswagen is at a critical moment where its electric strategy must succeed in order to maintain its position in the industry and avoid the threat of powerful competitors.