EV Production At VW Cheaper As Production Costs Dropped To 30 Percent

Volkswagen continues the process of reducing production costs at its main German factories, most of which already exclusively assemble electric cars.

The German automaker managed to reduce production costs in its three largest plants in Germany (Emden, Wolfsburg, and Zwickau) by 30 percent. Emden and Zwickau have exclusively produced electric vehicles for several years, making this improvement key to the German group’s electrification plans.

The company is also optimizing platform production in its European factories. Thomas Schaefer, CEO of the Volkswagen brand and head of Brand Group Core, said in a recent interview that he will systematically use platform-optimized production at VW plants. A good example is the family of electric city cars, especially the ID. Polo, ID. Cross, CUPRA Raval, and Škoda Epiq.

“We developed the platform and software in Wolfsburg, while CUPRA manages the project. We produce cars for all three brands in two factories in Spain: Martorel and Pamplona. A traditional project division would cost an additional 600 million euros. We invest part of that money in products.”

The CEO celebrates the savings achieved in Germany, a country not known for its low labor costs.

“Since the agreement reached with our employee representatives and the IG Metall union in December 2024, the Volkswagen brand has already managed to reduce production costs by an average of around 30 percent at its plants in Wolfsburg, Emden, and Zwickau.”

“We are also making good progress with the planned workforce reduction and reduction of development costs. From the socially responsible planned reduction of 35,000 jobs by 2030, we have already finalized 25,000 partial retirement and severance agreements. It is possible to develop and produce competitive cars in Germany,” Schaefer concludes.

Emden and Zwickau currently produce only electric cars, while Wolfsburg will be responsible for the production of the future Volkswagen ID. Golf and ID.Roc, which will be based on the SSP platform. This architecture, on paper, should be much cheaper than the current MEB platform, allowing the group to develop more affordable and profitable electric cars.

Before the arrival of these models, which will debut at the end of the decade, Volkswagen will be forced to make room in Wolfsburg. How will they achieve this? By moving production of the regular Golf to Mexico, a move similar to the one made half a century ago with the Beetle, which continued to be produced in the Latin American country until 2003.

• Also See: VW Believes That EVs Will Be Saved And Has Announced Longer-Range Models