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Volkswagen to Cut Temporary Workers at German EV Plant Due to Declining European Demand

Volkswagen, one of the world’s leading automotive manufacturers, is preparing to lay off contract workers at its electric vehicle (EV) production facility in Zwickau, Germany, amid a downturn in European EV demand.

The Zwickau plant, situated near the Czech Republic border, serves as Volkswagen’s primary electric car manufacturing hub. The decision to reduce its workforce comes in response to waning orders for electric vehicles across Europe.

Reports suggest that nearly 300 temporary contract workers employed at the Zwickau factory, whose contracts are set to expire in October, will face termination. However, it remains unclear whether Volkswagen will extend the layoffs to affect an additional 2,000 contract employees, as the company has yet to confirm its final decision.

Volkswagen is confronting the challenge of bolstering its electric car sales to compete with Tesla, which currently dominates the global electric vehicle market. The German automaker predominantly manufactures its electric cars within Germany. However, the demand for Volkswagen’s ID series electric cars has been adversely affected by the economic slowdown in Europe, exacerbated by surging energy costs and elevated living expenses, coupled with rising interest rates.

The report further notes that Volkswagen employs approximately 2,700 temporary contract workers at the Zwickau plant to align with anticipated surges in demand. Nevertheless, a decline in orders from corporate clients has transpired due to the expiration of government subsidies intended to incentivize companies to purchase electric vehicles, which concluded earlier this month.

Corporate customers account for nearly 70% of the ID electric cars produced at the Zwickau facility.

Volkswagen has refrained from providing an official statement on this matter at this time.

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