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Volkswagen Layoffs and Plant Closures Follow Volvo’s Scrapped Electric Vehicle Target

Published
Kurt Robson
Published
By Kurt Robson
Edited by Samantha Dunn

Key Takeaways

  • Volkswagen is closing at least three factories in Germany as it looks to cut costs.
  • In September, Swedish manufacturer Volvo announced it was ditching its plans to sell only EVs by 2030.
  • The EU’s regulatory landscape has led to the slower adoption of electric vehicles. 

Volkswagen will lay off tens of thousands of staff with the closure of at least three factories in Germany.

The major cuts to its workforce come as the German company faces fierce competition from its Chinese rivals—and just one month after Swedish carmaker Volvo announced it was scrapping its electric vehicle target.

Layoffs and Closures

Daniela Cavallo, head of Volkswagen’s works council, told employees  on Monday that management was “absolutely serious” about its plans.

“This is the plan of Germany’s largest industrial group to start the sell-off in its home country of Germany,” Cavallo said.

It was not confirmed which plants would be closed and how many staff would be laid off.

The planned closures come after months of conflict between the company’s workers and senior management.

Cavallo claimed that the workers and management agreed on the carmaker’s problems but disagreed with the action plan.

“We are not far apart when it comes to analyzing the problems. But we are miles apart on the answers to them,” she said.

Cavallo said that Volkswagen and other EU car manufacturers are facing a slower-than-expected transition to EVs and strong competition from Chinese carmakers entering the region.

Volvo Ditches EV Targets

In September, Swedish manufacturer Volvo announced  it was ditching its plans to sell only EVs by 2030.

The carmaker said it would aim for between 90 and 100 percent of its vehicles to be fully electric or hybrid by the end of the decade.

However, Volvo insisted that the future of the automotive industry remains electric.

Volvo claimed it had to change its initial plans due to the “slower than expected” rollout of charging infrastructure, as well as regulatory uncertainty in the EU.

Slower Adoption

In 2023, China had 60% of new electric car registrations , while just under 25% were registered in Europe.

While the EU has committed to ambitious climate goals, including a complete ban on petrol car sales in 2035, an uneven and sometimes unclear regulatory environment has slowed its transition to EVs.

The EU’s regulatory landscape, marked by delays and uncertainties, has led to the slower adoption of electric vehicles. 

Regulation clarity has allowed China, which enforces aggressive EV policies, to take the lead in production.

To combat China’s dominance, the EU implemented tariffs in July, raising duties on Chinese-made EVs to as high as 48%.

In September, Dataforce reported a second month of declining share for Chinese car brands in the EU following the tariffs.

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