German state premier demands new EV for Wolfsburg

FRANKFURT -- Volkswagen Group must allocate production of a new full-electric car to the automaker's home plant in Wolfsburg, Germany, said Stephan Weil, premier of Lower Saxony.

Weil's demand came after VW failed to give Wolfsburg a battery-powered model in the automaker's latest five-year investment program.

Weil called on VW Group CEO Herbert Diess to propose a plan to build full-electric models in Wolfsburg that could be considered by the automaker's supervisory board next year.

"There must be secure prospects for the employees in Wolfsburg," said Weil, who is a VW supervisory board representing Lower Saxony, which holds a 20 percent voting stake in VW.

VW Group is investing heavily in its German plants at Zwickau and Emden to build full-electric vehicles but its home plant in Wolfsburg continues to be VW brand's last major car-producing plant that has not been allocated a new-generation electric car for production.

"Volkswagen is being restructured with a determined focus on electric mobility and everyone knows that must also involve the largest site," Weil told reporters on Friday.

In VW's latest investment decisions, Wolfsburg lost out to Hanover, also in Lower Saxony, in the competition for the most funding over the next five years.

A total of over 3 billion euros ($3.55 billion) were earmarked for investments in Wolfsburg, including production, administration and technical development. By comparison, nearly 4.5 billion euros is destined for Hanover, VW's second-oldest German factory after Wolfsburg.

VW will build a flagship electric car for its Audi, Porsche and Bentley brands in Hanover, along with the ID Buzz, a modern, full-electric version of VW's Microbus that became a 1960s icon.

Wolfsburg's fortunes have suffered in recent months as demand has decreased for the Golf hatchback, VW's best-seller in Europe. Golf sales in Europe fell 35 percent to 220,445 in the first 9 months, according to JATO Dynamics market researchers.

VW has ended production of the electric version of the Golf in Wolfsburg. The eGolf is built in small numbers at VW's Dreden plant but production is being phased out as the automaker rolls out its ID3 compact EV.

Wolfsburg's only electrified model is plug-in hybrid version of the Golf that will be joined soon by Tiguan plug-in models under the "eHybrid" designation.

VW's labor leaders are also asking for substantial EV investment into the Wolfsburg factory.

The plant's output will fall to about 500,000 vehicles this year from 700,000 in 2019, works council chief Bernd Osterloh told a local newspaper.

He expects the factory's annual production in 2025 will still be 500,000 as consumers switch from hatchbacks such as the Golf to SUVs and electric cars such as the ID3.

The drop contrasts sharply with VW management's goal of annual production of 1 million vehicles for Wolfsburg.

"We want a next-generation electric vehicle with the newest software from 2025," Osterloh told the Braunschweiger Zeitung in September.

Wolfsburg had VW Group's second most competitive manufacturing costs in Germany after Zwickau, he said.

VW is spending about 1 billion euros at its Emden factory for production of electric-only models.

In 2022, Emden will build the ID4 compact crossover and in 2023 production will begin of midsize electric sedans and station wagons that are internally referred to as the "Aero." They will be based on the ID Vizzion and Space Vizzion concepts.

Weil also said he wanted to see a plan for electric-car production at VW’s factory in Osnabrueck where the T-Roc Cabrio is built. Acquired in 2009 from the now insolvent Karmann, the site once built the Karmann Ghia as well as a number of other convertible and or small series models such as the VW XL1.