Shortly after Stellantis announced temporary closures, competitor Volkswagen is also reducing production at several of its German electric car production sites. Sales of fully electric cars remain too weak.
While the August statistics showed a spark of hope for electric cars, with an uptick of 30%, absolute sales numbers still fail to match production. Currently, they hold a market share of 15.8% in Europe.
Audi Q4 E-tron suffers
Predictions aimed for double that figure. So, it doesn’t come as a surprise that Volkswagen’s flagship electric vehicle plant in Zwickau will be idled for a week in the coming month.
With one in two electric cars from the Volkswagen Group being built there, the factory is most hit by the lagging sales. The most problematic model is the Audi Q4 e-tron, whose sales have been stuck in a rut due to tariffs imposed by President Trump.
Dresden, another EV site, will also be closed temporarily, while workers at Osnabrück face shortened weeks. A decision on the Emden plant, where the ID.4 and ID.7 are built, is expected soon.
At Zwickau, where Volkswagen ceased production of combustion engines in 2020, the shift to all-electric cars was presented as irreversible. Yet the factory, which produces models for Volkswagen, Audi, and Cupra, now finds itself struggling to justify its vast capacity.
Electric car adoption fares well in countries with strong corporate incentives. Still, it falls short in the private market, where customers often opt for plug-in hybrids due to concerns about range anxiety.
Contrast with combustion-engined models
Volkswagen insists the slowdown is temporary. Additionally, it notes that combustion models are still selling strongly on the sidelines. The German group is responsible for one quarter of the European market.
The underlying trend can’t be denied: the contrast between full order books for combustion-engined cars and idle EV plants points to a more complicated transition than policymakers in Brussels envisaged.
Volkswagen’s decision to push the pause button coincides with similar steps at Stellantis, Europe’s other automotive heavyweight. The Franco-Italian group is suspending production at sites across the continent.
In Poissy, outside Paris, two thousand workers will spend three weeks on partial unemployment in October, raising fears among unions that management is preparing the ground for deeper cuts. The factory, the last central car plant in the Paris region, has no confirmed replacement for the Opel Mokka, which is due to be phased out in 2028.
Long-term restructuring?
Stellantis is also reducing output at Pomigliano near Naples, where the Fiat Panda and Alfa Romeo Tonale are built, and will halt lines for several days in Zaragoza and Madrid. Polish and German plants are bracing for similar closures. Executives frame the interruptions as inventory management, but in these cases, unions fear them as a warning sign of long-term restructuring.
Another pain point in the electric car market is that both Volkswagen and Stellantis face growing pressure from Chinese competitors. Brands such as BYD have seen a sharp increase in European sales (+241% last month), offering models that are often cheaper and better equipped.
The latest production slump highlights Europe’s struggle to achieve its electric car ambitions. For workers, from Zwickau to Poissy, the transition that was supposed to secure their jobs now raises questions about whether factories built for the electric future will face more structural measures in the mid-term.
