Volkswagen's cheap electric cars do not come from Germany
from Constantin Hoffmann to Oct 07, 2024
Volkswagen has announced that it will no longer produce its inexpensive electric cars in Germany in the future. Instead, models are to roll off the band in Spain from 2026 in 2026. The automobile manufacturer reacts to high production costs in the home country and relies to locations with more efficient structures.
Why Germany is no longer in the race
High costs as the main reason
The decision against Germany as a production location for cheap electric cars is mainly based on the high manufacturing costs. According to internal sources, works in Portugal and Poland are currently the favorites for production. Skoda in the Czech Republic is also the possible location in the room.
Factory closures and crisis
Volkswagen is in a challenging phase. It is even discussed about possible factory closures in Germany. New models alone are not enough to utilize the German works. Cost efficiency plays a crucial role in the future strategy of the group.
Future plans: VW ID.1 and more
New models from 2027
Around 2027 or 2028 Volkswagen is planning the introduction of a new generation of electric cars, including the VW ID.1 for less than 20,000 euros. The production site for this has not yet been decided, but Germany is excluded due to the cost structure.
"Bring your own device" strategy
An interesting detail is Volkswagen's consideration of avoiding permanent installed infotainment systems for cheap electric cars. Instead, drivers should use their own smartphone for navigation and entertainment. This "Bring your own device"Strategy could further reduce production costs because both hardware and software development are saved.
Investments in new locations
Advantages of Portugal and Spain
One argument for Portugal is the plan of Powerco, a VW subsidiary who wants to build a work for battery production in Valencia from 2025. The VW plant in Palmela, Portugal, is also considered extremely efficient because work is carried out consistently.
Conclusion: change of strategy for more efficiency
Volkswagen's decision to no longer produce cheap electric cars in Germany marks a significant change of strategy. The focus is now on cost efficiency and the use of international locations. The coming years will show how these measures affect the group's market position.
Keywords: Volkswagen electric car, VW ID.1, cheap electric cars, electric car production, Bring your own device