Volkswagen Ponders Staff Cuts as European BEV Sales Slow

Sluggish sales of BEVs in European markets has seen Volkswagen consider cutting staff numbers at one of its dedicated electric vehicle plants in Germany.

Reuters reports that according to the dpa news agency the automaker could be about to reduce its staffing at its plant in the eastern German city of Zwickau. The move could see staff numbers thinned by allowing fixed-term contracts to expire, which could affect a few hundred employees at the end of October.

Competition from cheaper foreign brands, such as Tesla and the Chinese automakers including BYD, Xpeng and NIO, has been blamed for the poor sales of Volkswagen’s premium-pitched models. Demand has also been dampened in the European BEV market because of to high inflation, high interest rates on car loans and cuts to ownership subsidies.

Currently more than 2,000 people work at the factory on a fixed-term contract, out of about 10,700 employees total, the agency says. Volkswagen said that a staff meeting is planned at the plant on but declined to comment on specifics. Trade union IG Metall representatives have written a letter to management asking what the carmaker is doing about demand and if the factory will remain a three-shift location, dpa said.

The Zwickau plant produces six electric vehicle models from three brands across the Volkswagen Group, according to its website. Volkswagen had announced in 2018 it would spend $1.29Bn converting the plant to electric vehicle production, keeping the workforce stable despite EVs requiring less labor than combustion engine cars in the expectation of increasing output.

— Paul Myles is a seasoned automotive journalist based in Europe. Follow him on Twitter @Paulmyles_  and Threads