Volkswagen Group has paused development of the battery-electric Golf at its Wolfsburg plant because the factory failed to meet cost-control targets.
The plant is short of a EUR 300 million (about USD 336 million) cost-reduction target, according to the internal case reported by Chinese automotive press.
Thomas Schaefer, who heads the Volkswagen, Skoda and Seat/Cupra brands, told staff in an internal memo: “I know what the Golf means for Volkswagen and for Wolfsburg, so this decision was not easy for us. But we simply cannot afford this development work at the moment.”
The electric Golf is expected to be called ID. Golf and was scheduled to enter production at Wolfsburg in the early 2030s. Engineers are working out how to develop the next Golf on the group’s forthcoming SSP electric platform.
The loss behind the pause
The pause underlines the financial pressure on the group. To answer competition from Chinese carmakers and falling demand in its main markets, Volkswagen is pushing ahead with 100,000 job cuts and the closure of up to four German plants.
On 29 October the group reported a EUR 5.9 billion (about USD 6.59 billion) operating loss for the third quarter, its largest quarterly loss since the fourth quarter of 2015, when it booked one-off charges over the diesel emissions scandal.
Relations with IG Metall have deteriorated over the restructuring. The union is considering industrial action from 1 January. Audi’s plan to invest USD 4 billion in a new United States plant, announced at a campaign event for President Donald Trump before board approval, has also angered staff.
The works council’s condition
The works council reacted cautiously to the pause and stressed that earlier production commitments remain valid. It said the management board is still responsible for delivering them.
In a statement by email, the works council said freezing early-stage spending on the ID. Golf again reflects the pressure on the group’s finances. It added that the pause will not affect the launch timing and that the lost schedule will be recovered.
The ID. Golf is due to be built at Wolfsburg alongside the electric T-Roc small SUV. The combustion Golf is scheduled to move from Wolfsburg to Mexico in 2027.
Read together, the three decisions describe one industrial logic. The combustion car leaves Germany because it can be built cheaper elsewhere, and the electric replacement waits because the plant that would build it has not yet earned the right to.
Editor’s note: This is an adapted translation of the original Gasgoo report. It has been trimmed and restructured for readability for an international business audience. The full original (in Chinese) is at https://auto.gasgoo.com/news/202611/3I70476778C101.shtml.