VW: Is Zwickau’s future still uncertain?

Following the agreement to the wage dispute that was reached shortly before Christmas, it was clear that Volkswagen's EV plant in Zwickau would have to give up some model series. Soon, only the Audi Q4 e-tron will come from Zwickau, but the plant's future is secure - or so it seemed. But Volkswagen is already considering other options.

As Der Spiegel writes, there are concrete discussions about withdrawing the Audi Q4 e-tron from Zwickau in the first half of the 2030s. “It means that at least the vehicles destined for the important North American market could be built at Volkswagen’s US plant in Chattanooga from the next decade,” the article states. If “at least” the North American models will no longer be built in Zwickau, it raises the question of what will happen to the vehicles for the other markets – demand is currently not so high that it would make sense to produce the model at two locations.

Audi’s statement on the information is also unlikely to provide relief in Zwickau: an Audi spokesperson told Der Spiegel that various scenarios are currently being examined.

The “Christmas truce” between VW management and the works council met some of the demands of both sides – billions were saved, but – notably for the works council – no plants were officially closed. However, it quickly became apparent that in the case of Osnabrück (a buyer was to be sought there) and Dresden (production of the ID.3 will end, but the site will be kept “with third parties”), the closure could only be postponed.

Only one model left from Zwickau

Doubts about the compromise also quickly arose around Zwickau: Five models are currently built on two lines – the ID.3 and Cupra Born on one, the ID.4, ID.5 and Q4 e-tron on another. All VW models and the Born will be relocated to other plants starting in 2027. Zwickau will shrink to one line and one model. In addition, unspecified projects relating to the circular economy will be located in Zwickau. It is unclear how the plant, which was already considered to be underutilised with five models, can be profitable with just one model series. Zwickau will then also be dependent on demand for just one model. If the Q4 e-tron sells less well, Zwickau will have no means of compensating for the volume with another model.

Moreover, VW already builds the ID.4 for the US market at its US plant in Chattanooga – in other words, an MEB model. There are thus, theoretically, greater synergies in Chattanooga than in Zwickau if two electric SUVs could be built there on a shared platform in the future. Especially as there have been repeated discussions about building vehicles from other Group brands in Chattanooga – but this has not yet been decided.

If the information is correct, it is at least certain that there will be a successor generation of the Q4 e-tron. The usual model cycle after the 2021 premiere was set to end in 2028 or 2029. If a relocation in the first half of the 2030s is on the table, it will likely affect the second generation – presumably no longer based on the MEB, but on the SSP.

Incidentally, the compromise means that Volkswagen employees in Zwickau will also be included in the VW in-house collective agreement. Previously, this was only the case for employees at the plants in Lower Saxony. The in-house agreement also means that the workers in Zwickau are protected from redundancies by the recently extended job security scheme – at least until the end of 2030. The timing of the discussion about the relocation in the first half of the 2030s could thus be deliberate.

spiegel.de (paywall; in German)