- Volkswagen is now receiving more EV orders than combustion-engine car orders in Germany.
- Stronger EV demand is prompting the company to ramp up production while cutting planned extra ICE shifts.
- The money issue is hard to ignore: EVs are still less profitable than comparable gas-powered cars.
Volkswagen has a rather interesting problem on its hands. Electric car demand in Germany has picked up so much that the automaker is now receiving more orders for pure EVs than combustion-powered cars. You’d think that would be cause for celebration, especially after years of struggling to convince customers to go electric. Instead, VW is canceling planned extra shifts at its massive Wolfsburg factory.
According to Automobilwoche, the automaker is adjusting production because the shift in customer demand has happened faster than expected. In other words, VW has found itself in the unusual position of having too much capacity for ICE-powered cars as more customers switch to EVs.
At Wolfsburg, aka “the heart of the VW brand,” planned additional shifts are being scrapped. That means the factory is expected to produce around 580,000 vehicles this year rather than exceeding 600,000. The 88-year-old plant produces the Golf, Tiguan, and Tayron. As a refresher, later in 2027, production of the Golf will move to Mexico’s Puebla plant. Yes, the Golf will no longer be made in Germany.
Photo by: Volkswagen
EV Demand Is Rising, But It’s Complicated
Meanwhile, VW plans at least two extra shifts in Emden to increase production of the midsize ID.7 liftback and wagon. Zwickau is also benefiting from stronger demand for the ID.3 Neo, the new name for the company’s compact rear-wheel-drive-based hatchback. But the biggest star in the EV range right now is the new ID. Polo, which has already racked up more than 40,000 orders across Europe. Made in Spain, the subcompact hatch just won the Budget category at the German Car of the Year (GCOTY), beating Renault’s Twingo and Clio.
VW spent years trying to make EVs work while customers complained about high prices and limited choice. Now the company finally has a batch of smaller, more affordable electric cars arriving as demand for EVs gains traction in Germany. Of course, rising fuel prices are also accelerating the switch to purely electric vehicles.
But VW is unlikely to be thrilled, as selling more EVs doesn’t automatically mean making more money. Profit margins remain smaller than those of a comparable ICE car. That’s particularly awkward for a company in the middle of a historic cost-cutting program.
even cheaper EV launching next year, the ID. up! (name not confirmed) should convince even more people to make the switch to EVs. That said, the irony is hard to miss. VW desperately needs its EV business to grow. It is now growing. But the faster the market shifts toward EVs, the more pressure factories designed around the combustion engine will face. And Wolfsburg sits right in the middle of that transition, at least until the confirmed electric Golf and T-Roc hit the assembly line in Wolfsburg in the next few years.
For now, though, the largest VW factory is still building gasoline-powered cars, and that’s the part of the business German customers seem increasingly less interested in.
2026 Volkswagen ID. Polo
Motor1’s Take: After years of EV demand falling short of expectations, VW finally has more electric orders than combustion orders in its home market. That’s a pretty big deal. The problem is that the company’s industrial footprint hasn’t caught up with its customers.
Wolfsburg was built around the combustion engine. New demand is increasingly coming from electric cars built elsewhere. That’s why VW can have a booming EV order book while canceling extra shifts at its most famous factory.
The good news is that a new generation of cheaper EVs is doing what the earlier ID models struggled to do: attract customers in meaningful numbers. Selling more electric cars also helps lower fleet emissions and avoid the EU’s hefty fines, or at least reduce the amount VW has to pay. The less-good news is that VW still needs to figure out how to make those cars profitably while shrinking a manufacturing empire designed for an automotive era that’s ending.
Problems At VW:
Source:
Automobilwoche
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