Volkswagen cancels plans to build ID.3 at main plant because ‘every euro counts’

Volkswagen has canceled plans to build its all-electric ID.3 at its main factory in Wolfsburg, Germany, due to low demand, adding that “every euro that we do have to spend counts.” It will keep production at its EV-only plant, where it has been shaving off jobs for months.

Volkswagen had planned to build its ID3 BEV hatchback at the Wolfsburg plant but says that low demand will keep its production at the automaker’s EV-only plant in Zwickau, in eastern Germany, reports German news outlet Handelsblatt.

“Every euro that we do not have to spend counts,” VW’s production chief Christian Vollmer said. “For this reason, we have decided to continue to bundle the volume of the ID3 in Zwickau and to effectively utilize the already fully equipped site.” The company has been reducing shifts at Zwickau for months due to what it says is “slow demand.”

Meanwhile, the automaker will keep its production of ICE and plug-in hybrid vehicles such as the Golf and Tiguan up and running in Wolfsburg for the time being.

“These are all strong models that will keep the plant well utilized,” Vollmer said. “I am confident that we will exceed the 500,000 vehicles produced at the main plant this year for the first time in a long time.” in 2023, VW delivered 140,800 ID3s, reports Automotive News Europe.

Last year, the VW Group also announced a cost-cutting program designed to save €10 billion ($10.8 billion) by 2026, with the company slashing thousands of jobs as a result. The goal is to meet a return-on-sales target of 6.5%, which is up from 3.6% last year, according to Reuters.

VW had planned to add overflow production of the ID2 at its main plant, with small-scale production scheduled to originally start at the end of last year.

Meanwhile, the ID3 will also continue to be built at VW’s Dresden plant, where it is built in small numbers.

Renault confirmed last month that it is in talks with Volkswagen to build a BEV minicar for the European market. Volkswagen and Chinese EV maker Xpeng also announced that they are jointly developing two mid-sized BEVs for 2026 for mainland China, with the first model being an SUV.