VW pauses ID.4 production in the US
The Chattanooga Times Free Press was the first to report on the production halt, and the carmaker has largely confirmed the information. According to the article, production of the ID.4 at VW’s only US plant was already scaled back this week, before then being completely halted at the end of October. In a first step, 80 production employees have already been sent home for the time being. However, Volkswagen will supplement the Tennessee state unemployment benefits so that affected employees receive 80 per cent of their base salary and retain their benefits.
“This adjustment in no way changes our commitment to the ID.4, our growing EV portfolio or our commitment to our Chattanooga team,” VW spokesman Michael Lowder said in an email statement to the newspaper. “This is a market-driven decision, based on aligning our production volume to market demand.”
However, VW has not specified how long furloughed employees will have to stay away or how long the production pause will last – nor does the article in the Chattanooga Times Free Press contain any information or speculation on this subject. It therefore remains unclear whether production will resume this year or whether this will be a longer interruption.
VW manufactures the Atlas combustion engine SUV at its plant in the US state of Tennessee, and, since summer 2022, the MEB-based electric ID.4 for the US market. Volkswagen USA itself announced in July that sales of the ID.4 in the second quarter were 65 per cent below the previous year’s level, citing a difficult environment at the time. One thing is clear: between April and June, VW sold fewer than 2,000 ID.4s in the US. The ID. Buzz saw growth in the second quarter, but it is built in Hanover and shipped to the US, and the one-off effect following the delivery break is also likely to have contributed to the better figures in Q2.
One problem for Volkswagen is that, although it is built in the US, the ID.4 has not been eligible for the US tax credit of $7,500 since January due to stricter requirements for domestic sourcing of battery components. Although this subsidy will expire early at the end of September anyway, the ID.4 has been at a disadvantage since January compared to other electric SUVs that are still eligible.
According to the local newspaper, several large companies in the Chattanooga area have announced job cuts since July, ranging from the state’s largest health insurance company to an energy supplier and an automotive supplier. However, there could soon be positive news again: Chattanooga is reportedly one of the options for Audi to build its own US production facility – as a “twin plant” to the Volkswagen production facility, but with shared use of logistics and infrastructure.
This article was first published by Sebastian Schaal for electrive’s German edition.
1 Comment