Volkswagen Cuts ID.4 Production at U.S. Plant, Waning EV Demand to Blame
As yet further evidence of slowing demand for electric vehicles, Volkswagen this week decided to cut production of the ID.4 crossover at its Chattanooga, Tennessee plant.
This is where North American-bound ID.4s have been built since the summer of 2022, leaving the German factory in Zwickau to cater to the European market.
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As Automotive News reports, the production cut began on September 2, and some 160 employees will be furloughed starting in late October. To be clear, the future of the ID.4 is not in jeopardy: Volkswagen is simply adjusting to consumer demand, a U.S. spokesperson for the manufacturer said.
The ID.4 has previously faced production interruptions, sometimes lasting several months, due to design issues and other problems that led to safety recalls, particularly regarding the door handles. In fact, the list of recalls for the ID.4 keeps growing and currently stands at 15 recalls.
In the first half of 2025, ID.4 sales fell 19 percent in the U.S., including a 65-percent drop in the second quarter, according to data from Automotive News Research & Data Center. In Canada, the declines were 42 percent and 61 percent, respectively—enough to give VW management nightmares.
Many dealer lots across the country continue to overflow with ID.4s and huge deals are being advertised in the hope of clearing out inventory, including a number of 2024 models that have not yet been sold.
Things aren't likely to improve with the planned phaseout of government incentives on both sides of the border. In the U.S., the federal tax credit for the purchase of an electric vehicle will end after September 30, while in Quebec, the provincial rebate will decrease from $4,000 to $2,000 on January 1, 2026. The Canadian government's own rebate, meanwhile, has yet to return despite the goodwill of some elected officials in Ottawa.