According to a report from German newspaper Automobiliwoche, Volkswagen’s plant in Dresden, Germany, could see a halt in the production of ID.3 electric models. The factory, which employs around 300 full-time workers, has been responsible for manufacturing thousands of ID.3 models in the past year. However, Volkswagen is expected to maintain the location to some capacity and reassign workers to other areas of production and innovative testing.
The Dresden plant, which began production in 2002, has produced over 150,000 models, including the Phaeton, Bentley Flying Spur, VW e-Golf, and ID.3. Just last year, 6,500 ID.3 electric models were manufactured at the plant. While the fate of the additional 2,000 temporary employees remains uncertain, the decision to halt ID.3 production is part of Volkswagen’s broader strategy to reduce costs and improve its competitive position in the market.
The annual operating costs of the Dresden plant are estimated to be between 60 and 70 million euros. By interrupting ID.3 production, Volkswagen could potentially save around 20 million euros. This decision comes after Volkswagen recently announced job cuts at its Zwickau plant, where various electric vehicles including the ID.3 and the ID.4 SUV are manufactured.
The report suggests that a combination of factors such as lack of orders, higher inflation, and reduced subsidies has affected the demand for Volkswagen’s electric vehicles. As a result, Volkswagen is seeking to increase profitability and compete more effectively with other car manufacturers, including Tesla and Chinese electric vehicle manufacturers like BYD.
Oliver Blume, CEO of the Volkswagen Group, aims to increase profits for the Volkswagen brand to 6.5% by 2026, which translates to approximately 10 billion euros in earnings. Currently, the brand’s profits stand at around 3.6%. The decision to halt ID.3 production at the Dresden plant is part of Volkswagen’s efforts to optimize its operations and focus on more profitable avenues in the electric vehicle market.