In view of the low demand for electric cars, Volkswagen is threatened with job cuts at the Zwickau plant. According to dpa information, there is talk of not extending employees’ fixed-term contracts.

Initially, this could affect a few hundred of the approximately 10,700 employees at the Saxon location at the end of October. More than 2,000 people currently work there on fixed-term contracts. Depending on the further market situation, they could now face the end of their jobs at VW for the foreseeable future. A staff meeting is planned for Thursday.

“It is a serious situation,” said Saxony’s Economics Minister Martin Dulig (SPD) when asked. He has been in contact with the works council and his Lower Saxony counterpart Olaf Lies (SPD) for several weeks. He admitted that there are currently problems in the sales markets. This trend must not be allowed to increase.

It is important to look for ways to bring prospective buyers closer to German providers. One idea is a leasing initiative by Saxon companies. Dulig: “But VW itself is also asked to make suggestions on how the sales situation can be improved and stabilized.”

Demand sluggish

Uncertainty has been growing in the electric car factory for weeks due to sluggish demand. Many employees express concern. Representatives from IG Metall have now written a letter to the management. “Enough is enough! We finally want answers,” the “Freie Presse” quoted from the letter. Questions are being raised about why the electric cars are not advertised better and whether the factory will remain a 3-shift location.

VW has converted its factory in Zwickau into a factory for electric vehicles in recent years at a cost of 1.2 billion euros. The last combustion engine rolled off the assembly line there in 2020. In addition to ID models, Audi and Cupra vehicles are also produced. According to previous information, 218,000 electric cars were built last year. This year, production should actually increase – up to 360,000 vehicles would be possible at full capacity. Instead, shifts could now be reduced.

But in view of high inflation and declining subsidy premiums, car buyers are now reluctant to buy electric cars. Industry experts expect that the market share of electric cars for new registrations in Germany will decline sharply in the coming year. On average, electric cars are significantly more expensive than combustion engines.

In addition, the state purchase premium for commercial customers ceased on September 1st, and for private customers it drops from a maximum of 6,750 to 4,500 euros at the turn of the year. There is also growing competition for German manufacturers in this sector on international markets: not only from Tesla, but also Chinese manufacturers such as BYD.