Volkswagen cuts electric-car production amid drop in demand – report

German car giant Volkswagen has trimmed production of its electric vehicles in Europe due to lower than expected demand.

UK publication Autocar reports Volkswagen has cancelled a shift for two weeks on the German production line that builds the ID.4 electric SUV – and extended a holiday break for ID.4 assembly line workers by one week.

The measures are attributed to a drop in demand for electric vehicles due to customer demand that is said to be 30 per cent lower than planned production, according to Manfred Wulff, the head of the works council for the factory.

"We are experiencing strong customer reluctance in the electric vehicle sector,” Mr Wulff told the North West newspaper in Germany, according to Autocar.

Despite the dip in demand, Australia remains on the waiting list for any of Volkswagen's electric cars – and the arrival of the first model, the ID.4, is still six to 12 months away (due sometime in 2024), three years after it went on sale in Europe.

VW head office is said to have prioritised production of electric vehicles for Europe, where car makers are penalised if they do not meet strict fleet emissions standards. These are not present in Australia, which VW says pushed our market down the priority list.

The start of production for the Volkswagen ID.7 electric sedan has been pushed back from July 2023 to "later this year" due to the production cuts, according to Autocar.

A spokesperson for the ID.4 factory in Emden – where VW also builds the petrol-powered Passat, which is unaffected by the electric-car production cuts – told Autocar: "We are confident that the plant's utilisation will increase again with the launch of the ID.7 at the end of the year."

About 300 of the 1500 temporary workers employed at the German factory will not have their contracts renewed once they expire in August, Autocar reports.

Volkswagen has invested €1 billion ($AU1.6 billion) into electric-vehicle production at the Emden factory, with the next-generation Passat to be made in Slovakia for its next generation to free up space for more electric cars in the facility.

Minister of economic affairs for the state of Lower Saxony – where the Emden factory is located – Olaf Lies reportedly told Germany's North West newspaper: "The registration numbers of electric vehicles continue to be high, but what concerns us is the current dip in demand – not only at Volkswagen but across all manufacturers."