Even as it panders to the Liberal government for EV subsidies in this country, Volkswagen is slashing jobs amid cratering demand for its offerings in the European Union..On Thursday, it announced it is letting go 269 temporary workers at its Zwickau plant as their 12-month contracts expire. The fate of more than 2,000 additional staff at the factory remains uncertain..It comes after German demand for EVs plummeted when lavish government subsidies expired this month. .Germany ended incentives for all plug-in hybrids on December 31 of last year and eliminated corporate subsidies for fully battery-electric vehicles on September 1. It plans to phase out all subsidies for consumers by 2025..Corporate orders reportedly accounted for as much as 70% of VW’s EV sales..The German automaker — one of the world’s largest — had spent about €1.2 billion to repurpose the Zwickau plant for EV production and hire more than 3,000 people to build the ID.3, ID.4 and ID.5 models. .Its 'electric offensive' was announced in 2018 to great fanfare with support from the German government and powerful labour unions. VW had eventually hoped to build as many as 330,000 of the cars annually..The company is instead offshoring EV production to Asia, following the likes of Tesla and BMW, where production costs are lower. Its Cupra subsidiary is reportedly preparing to launch an all-electric SUV based on the ID platform built at its Chinese factory in 2024..It comes after EU President Ursula von der Leyen — who is from Germany — on Wednesday said Brussels is launching an investigation into Chinese EV subsidies to ward off a flood of cheap imports into the bloc that could lead to import tariffs and other penalties.."Global markets are now flooded with cheaper electric cars. And their price is kept artificially low by huge state subsidies," she said in her annual address to the bloc's parliament..Predictably, China was outraged, calling it “a naked protectionist act that will seriously disrupt and distort the global automotive industry and supply chain, including the EU, and will have a negative impact on China-EU economic and trade relations,” China's Ministry of Commerce said in a statement..In its own statement, VW denied it is abandoning EVs. “Volkswagen remains 100% convinced of the path to electric mobility. The Zwickau location plays a central role in this.”.In July, the company announced EV production cuts at other German factories on the order of 30% by reducing shifts and vehicle lines citing “strong customer reluctance” to buy EVs..“We notice the reluctance of customers in the electrical world very vehemently,” VW executive Manfred Wulff told the German Nordwest-Zeitung newspaper.
Even as it panders to the Liberal government for EV subsidies in this country, Volkswagen is slashing jobs amid cratering demand for its offerings in the European Union..On Thursday, it announced it is letting go 269 temporary workers at its Zwickau plant as their 12-month contracts expire. The fate of more than 2,000 additional staff at the factory remains uncertain..It comes after German demand for EVs plummeted when lavish government subsidies expired this month. .Germany ended incentives for all plug-in hybrids on December 31 of last year and eliminated corporate subsidies for fully battery-electric vehicles on September 1. It plans to phase out all subsidies for consumers by 2025..Corporate orders reportedly accounted for as much as 70% of VW’s EV sales..The German automaker — one of the world’s largest — had spent about €1.2 billion to repurpose the Zwickau plant for EV production and hire more than 3,000 people to build the ID.3, ID.4 and ID.5 models. .Its 'electric offensive' was announced in 2018 to great fanfare with support from the German government and powerful labour unions. VW had eventually hoped to build as many as 330,000 of the cars annually..The company is instead offshoring EV production to Asia, following the likes of Tesla and BMW, where production costs are lower. Its Cupra subsidiary is reportedly preparing to launch an all-electric SUV based on the ID platform built at its Chinese factory in 2024..It comes after EU President Ursula von der Leyen — who is from Germany — on Wednesday said Brussels is launching an investigation into Chinese EV subsidies to ward off a flood of cheap imports into the bloc that could lead to import tariffs and other penalties.."Global markets are now flooded with cheaper electric cars. And their price is kept artificially low by huge state subsidies," she said in her annual address to the bloc's parliament..Predictably, China was outraged, calling it “a naked protectionist act that will seriously disrupt and distort the global automotive industry and supply chain, including the EU, and will have a negative impact on China-EU economic and trade relations,” China's Ministry of Commerce said in a statement..In its own statement, VW denied it is abandoning EVs. “Volkswagen remains 100% convinced of the path to electric mobility. The Zwickau location plays a central role in this.”.In July, the company announced EV production cuts at other German factories on the order of 30% by reducing shifts and vehicle lines citing “strong customer reluctance” to buy EVs..“We notice the reluctance of customers in the electrical world very vehemently,” VW executive Manfred Wulff told the German Nordwest-Zeitung newspaper.
