Volkswagen’s EV troubles deepen with possible Audi plant closure

Volkswagen may close its first plant in Europe ever. As it looks to cut costs amid falling EV sales, Volkswagen warned a possible Audi assembly plant closure in Brussels is an option.

It’s been 26 years since the doors were shut at VW’s Westmoreland assembly factory in Pennsylvania, its last plant closure.

However, that could soon change. Volkswagen’s Audi said in a statement Tuesday that it’s considering ending Q8 e-tron production early. The Q8 e-tron is the only model built at Audi’s site in Brussels.

Plant management has already reached out to the Company Council, announcing plans to restructure the site.

Audi said closing the plant would be possible if no alternatives were reached. “The announcement of the intention does not mean that a decision has been made,” according to Volker Germann, CEO of Audi Brussels. He added, “We will take all perspectives into account.”

The move comes as Audi’s sales fell over 11% in the second quarter of 2024. Audi claimed the decline is part of a broader global slowdown in the electric luxury segment.

Volkswagen eyes Audi EV plant closure in Brussels

Audi’s Q8 e-tron and Q8 Sportback e-tron, both produced in Brussels, have been hit hard. Volkswagen sold 17,900 Audi Q8 e-tron (including Sportback) models in the first half of 2024, down from the 19,500 handed over in 1H 2023.

The decline comes as overall VW Group EV deliveries fell to 317,200 in the first half of the year from 321,600 last year (-8%). Its best-selling EVs were the following:

• VW ID.4 and ID.5: 86,800
• VW ID.3: 66,200
• Audi Q4 e-tron: 52,100
• Škoda Enyaq: 29,400
• CUPRA Born: 18,200
• Audi Q8 e-tron: 17,900
• Volkswagen ID. Buzz: 14,600

Volkswagen was hit especially hard in China (falling nearly 20% YOY) as domestic EV makers like BYD continue launching longer-range, lower-priced electric cars. The company cited a “highly competitive environment ” for the fallout.

Despite this, VW said its order bank in Western Europe rose to around 170,000. With the new VW ID.7 Tourer, Audi Q6 e-tron (see our new review), and Porsche Macan Electric rolling out, the brand expects momentum to shift.

Electrek’s Take

Volkswagen lowered its operating returns guidance from 7 to 7.5% to 6.5 to 7% after EV sales slid. Its luxury brand, Porsche, also reduced its earnings outlook.

Porsche trimmed its earnings forecast to €3.5 billion ($3.8 billion) from €5.5 billion ($6 billion) after Taycan deliveries slipped 51% in Q2. The luxury brand expects demand to pick up with the updated 2025 Taycan and new Macan Electric rolling out in the second half of the year.

However, will Volkswagen turn things around in China? One of its (if not the) most important markets. VW faces stiff competition from domestic EV makers like BYD.

BYD launched its new 2025 Dolphin EV this week. The new Dolphin, one of BYD’s top-selling EVs, still starts at under $13,700 (RMB 99,800), but it features even more range.

Although BYD is best known for its low-cost EVs, like the Dolphin, Atto 3, and Seagull (Dolphin Mini overseas), it’s expanding into electric luxury vehicles, pickups, mid-size SUVs, and supercars.

BYD’s new luxury electric sedan, the Yangwang U7, hit showrooms in China this week as the latest Porsche challenger.

Porsche hopes its new Macan Electric, equipped with CATL batteries, can compete in the world’s largest EV market.

What do you guys think? Can Volkswagen turn things around? Or will things get worse from here? Let us know your thoughts below.