why the German car giant is running out of steam

This is the crisis at Volkswagen: insufficient demand has led to a reduction in production at its plant in Emden, Germany, affecting flagship models like the electric ID.3.

In the vast landscape of the electric automobile industry, Volkswagen (VW), the world-renowned automaker, is experiencing some pitfalls. VW’s plant in Emden, northern Germany, has recently borne the brunt of these difficulties, being forced to cut production due to demand not meeting expectations. The ID.3 electric sedan is one of the flagship models affected by this slowdown.

The production of electric models ID.4 and ID.7 is also affected. So, in the weeks leading up to factory holidays, the automaker will decrease late shifts dedicated to these two vehicles. Works council head Manfred Wulff confirmed the change in an interview with the Northwest newspaper.

According to a VW spokeswoman, the situation should improve at the end of the year with the launch of the ID.7. However, it should be noted that the production of thermal models, such as the Passat, is not affected by this slowdown.

Increased competition in the electricity market

So, how to explain this decline of Volkswagen? The manufacturer is in a transition period, with several launches planned, including that of the new ID.3. However, competition is fierce, especially with the American manufacturer Tesla, whose vehicles are positioned as being among the best and cheapest on the market. The ID.4, for example, is in direct competition with the Tesla Model Y. As an illustration, for each VW customer who receives their ID.4, three Tesla owners receive their Model Ys.

The entry into the market of Chinese manufacturers such as MG (SAIC group) and BYD is also making competition fiercer. These companies offer vehicles at competitive prices, which may explain the lack of appeal for Volkswagen models.

To face this competition, Volkswagen intends to launch the ID.2all, an electric car for less than 25,000 euros. However, this model will not be available before 2025. It therefore remains to be seen whether the German manufacturer will be able to maintain itself on the electric market by then and how it will adapt to the rapid changes in this industry.

Volkswagen ID.2 All

The case of Volkswagen perfectly illustrates the challenges to be met and the strategic decisions to be made to remain competitive in the new automotive landscape.

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