Volkswagen has cut production of electric vehicles at its Emden plant in northwestern Germany, and the adjustment has been linked to “customer reluctance”, with sales of electric vehicles falling short of expectations.
“Demand for electric vehicles is about 30% below Volkswagen’s forecast,” Emden plant manager Manfred Wolff said in a statement, EV news site Teslati reported.
“We are seeing strong customer resistance in the electric vehicle space,” he said.
Volkswagen attributed some of the decline in consumer interest to lower subsidies for electric car buyers across Europe and higher inflation.
The decline affected the company’s entire EV business. With the reduction in production at the Emden plant, Volkswagen will lay off 300 of the 1,500 employees involved in EV production at the facility.
Electric vehicle adoption has surged in recent years, but manufacturers are reportedly increasingly concerned that the high cost of electric vehicles is starting to make them less attractive. After all, a battery-powered car is about £10,000 ($12,700) more expensive than a petrol-powered one. The Telegraph reported that the price gap between electricity and fuel has also narrowed.
For this reason, Volkswagen plans to postpone production of the next ID.7 sedan from July until the end of the year. That’s a shame, given that the ID.7 is a pretty strong contender in the electric sedan market.
“Like other automakers, the Volkswagen brand is currently experiencing a slowdown in demand for electric vehicles. We are confident that the demand for fully electric vehicles will rise again as the year progresses.With the significantly improved ID.3 and the new ID.7, we continue to launch attractive new models. We will continue to do so,” Volkswagen UK said.
Recognizing the need for price competition in the electric vehicle segment, Volkswagen unveiled the prototype ‘ID’. 2all cost less than £22,000 ($27,900).
Volkswagen CEO Thomas Schaefer also hinted at an even more affordable electric car for under £17,500 ($22,000).
https://financialtribune.com/articles/auto/118988/volkswagen-cutting-electric-vehicle-output-over-customer-reluctance Volkswagen cuts electric car production due to ‘customer reluctance’