Capital Economy, Business and Finance
Sliding demand, Chinese competition and disappearing subsidies are forcing Europe's biggest carmaker to consider closing factories for the first time in its history. VW, which by last year had earmarked a staggering €180 billion to retool for electric vehicles, is now expecting to sell 500,000 fewer cars a year, all told, than before the pandemic. EV sales specifically – mainly of the ID.3 and ID.4 models – fell by 20 per cent in the year to July, partly because of Berlin's unexpected cancellation of subsidies for buyers last December; partly because Europe's charging infrastructure remains inadequate; and partly because cheap Chinese imports are flooding west despite the EU's best efforts to keep them out. Will VW actually close assembly lines? It's now in a fight with central and regional government as well as unions having threatened to do so. A more likely outcome is that it will take what help it can get to keep them open, but delay its full switch away from internal combustion engines – as Volvo did yesterday.
