VW still aiming for ID.3 electric car rollout by August

Volkswagen still expects to deliver its ID.3 mass-market electric car in August, even as it refuses to rule out job cuts if coronavirus-induced factory shutdowns outside of China continue.

The world’s largest carmaker, which is faced with fixed costs of more than €2bn a week while plants in Europe are idle, is bound by strict EU-wide emissions regulations and could face large fines if it fails to sell enough battery-powered vehicles in 2020.

“We are fighting for that date,” said Frank Witter, chief financial officer. However, he conceded that VW was “a bit handcuffed” due to the closure of the Zwickau plant, where the ID.3 is built, and delays in software development.

Mr Witter said that VW, which has closed its European plants at least until April 9, was hoping to restart production well before the summer.

“We are not assuming that [closures till June] as our most likely scenario,” he said. 

“But the legal framework and customers willingness to consider buying cars again will be key determinators.”

The assurance comes as a report from the University of St Gallen in Switzerland predicted that in an “optimistic scenario”, 100,000 jobs would have to be cut in the German carmaking sector due to the slump in sales.

“We must expect a significant reduction in production capacity in the automotive industry in Germany,” said Professor Ferdinand Dudenhöffer, who compiled the data. 

The global auto industry is expected to endure a worse decline than during the financial crisis, with about 10m fewer cars sold in 2020, according to IHS Markit.

While VW is yet to draw down its €20bn credit facility, several of its suppliers are struggling to stay afloat.

“We have suppliers being completely out of business in northern Italy, for example, and around the globe suppliers are under severe stress,” said Mr Witter, who added that VW would look at ways it could come to the aid of its most distressed contractors. 

Nonetheless, VW’s most lucrative market is beginning to recover. All but two of its 33 Chinese factories are back online, and the company intends to use the health and safety procedures implemented on those sites — such as temperature testing, face masks and distanced workers — to restart its European plants.

“Every time I’m down, I call my colleagues in China and what they tell me is lifting me up,” Mr Witter said.

“There are clear signs that the situation in terms of daily life and customers also considering buying cars again, is improving”
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