Volkswagen has made the decision to scrap its $2.1 billion plan to build a dedicated electric vehicle (EV) factory in Wolfsburg, Germany. Instead, the automaker intends to modify its existing plants in Zwickau and Wolfsburg to accommodate the production of a new flagship EV named Project Trinity and an all-electric Golf hatchback.
Volkswagen has abandoned its plan to construct a $2.1 billion EV factory in Germany and will instead modify existing plants for EV production. This decision reflects the company’s focus on cost-cutting and addresses its delayed entry into the EV market. However, Volkswagen is still facing challenges in establishing itself as a prominent player in the electric vehicle sector.
This move aligns with Volkswagen passenger cars boss Thomas Schaefer’s previous statement, made last year, that an additional factory might not be necessary as the company gradually reduces the production of combustion-engine vehicles over time. However, this decision is not solely motivated by the need to make room for EVs. Volkswagen is also actively engaging in cost-cutting measures.
In fact, during a meeting with senior leaders in July, Schaefer described Volkswagen’s situation by saying, “our roof is on fire,” emphasizing the urgent need to overhaul the company’s “complex, slow, and inflexible” processes. One significant aspect contributing to this need for change is Volkswagen’s delayed embrace of EV technology, which caused it to fall behind BYD in China.
Despite its ambitions in the electric vehicle sector, Volkswagen has yet to establish itself as a strong player. Just recently, Reuters reported that the automaker would temporarily halt production of two EV models, the ID.3 and Cupra Born, due to decreased demand.