The EU electric car market is currently in crisis and the drop in demand for certain models is causing a reduction in production. VW announced last week that it plans to temporarily lay off 269 employees for a period of 12 months at its plant in Zwickau. It seems that the crisis is more serious than thought because VW is stopping the production of ID.3 and Cupra Born in Zwickau and Dresden.

Due to the current market situation, VW will reduce production during the autumn holidays in Saxony from October 2 to 13 at the VW plant in Zwickau. Production of the VW ID.3 in Dresden will be suspended from October 2nd and will resume on October 16th.

VW faces growing competition, primarily from Tesla and a growing number of Chinese automakers. Taking into account the high inflation and the reduction of subsidies, the competition additionally affects the business of the German brand, due to which there is a reduced demand on the European market of electric vehicles.

Chinese electric cars had a privileged position in the EU, according to the statements of European Commission President Ursula von der Leyen. Therefore, the EU launched an investigation and some members, such as France, have already made decisions to protect domestic manufacturers.

French government considering a new subsidy decree. Citizens with lower incomes will have a subsidy of up to 7,000 euros for the purchase of a new electric car, while for others it will be up to 5,000 euros. This could lead to strained relations with China, and threaten the import of electric cars and small commercial vehicles in the amount of almost 7 billion dollars.

Source: Reuters