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VW must reduce the production of electric cars: there are not many consumers who want to spend more than 50,000 euros

The German newspaper Nordwest-Zeitung reports that Volkswagen has temporarily reduced the production of electric vehicles at one of its plants.

Volkswagen's Emden plant in Lower Saxony has reduced production of the ID.4 electric compact SUV and ID.7 sedan for the next two weeks due to declining sales.

The reason is trivial – the weakening of sales. Apparently, this concerns not only the ID.4, but also the start of production of the new ID.7 electric sedan. Demand is almost 30% lower than initially forecasted production figures.

Demand is almost 30% lower than originally projected production figures, as reported by the media. In the next two weeks, until the plant holidays, the night shift for the production of the ID.4 and the first models of the new ID.7 will be cancelled. The plant's three-week holiday will also be extended by one week for E-segment workers. In addition, around 300 of Emden's current 1,500 temporary workers will not be retained as of August.

Manfred Wulff, head of the works council at the Emden plant, told the German news agency that while the production of electric vehicles is being curtailed, that of combustion engine models, among others, was reported by the Autocar industry blog. which the Volkswagen Passat is not affected. So the problem is with the electrics.

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Wulff said 300 of the current 1,500 temporary workers employed at the plant will not have their contracts renewed in August. Furthermore, he pointed out that the demand for electric vehicles is 30% lower than the forecasted production figures.

“We are seeing strong reluctance from customers in the EV industry,” he told North West. How strange, I thought there was a queue of citizens willing to spend more than 53,000 euros for an ID4 and 55,000 euros for an ID7. Someone must have seriously miscalculated in VW and, in general, in Germany.

Wulff noted that the ID 7 sedan, which was due to start production in July, would be pushed back to "later this year."

North West interviewed Lower Saxony's Minister of Economic Affairs, Olaf Lies, who said: "The number of electric vehicle registrations continues to be high, but what concerns us is the current decline in demand, not only for Volkswagen but for all producers”.

The recession is suffocating the neck of the EU and of Germany in particular, and this obviously does not encourage the purchase of expensive cars, such as VW electrics:

The contraction is due to the downward revision of the second estimate by the German statistical institute, which showed that the eurozone's largest economy was in recession in early 2023.

The slowdown in the euro area economy is weighing on demand for consumer products, such as luxury electric vehicles. Many on the continent have faced the highest food and energy inflation in a generation as living standards have plummeted. This then has a direct impact on the cost of refueling electric vehicles, which are not cheaper.

Daniel Schwarz, an analyst at Stifel, commented on the news. He said: "The reduction in the number of temporary workers and the cancellation of a work shift indicate that VW does not expect the situation to improve in the short term." Indeed, the situation can only get worse for VolksWagen since electric Chinese cars are now entering the market, such as the BYD, which cost half the VW and have similar performance.

Will the drive towards electric vehicles be yet another German industrial boomerang? Study the case of the British motorcycle industry between the 60s and 70s of the last century.


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The article VW must reduce the production of electric cars: there are not many consumers who want to spend more than 50 thousand euros comes from Scenari Economici .


This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/vw-deve-calare-la-produzione-di-auto-elettriche-non-sono-molti-i-consumatori-che-vogliono-spendere-piu-di-50-mila-euro/ on Wed, 28 Jun 2023 09:00:01 +0000.