VW Delays Electric Golf as Cost Cuts Stall Factory Revamp
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Volkswagen AG is facing delays to the launch of its electric Golf, a setback for the German carmaker that’s grappling with a major restructuring, according to people familiar with the matter.
The plan to retool VW’s Wolfsburg factory for next-generation electric vehicles has stalled due to budget constraints, pushing back the launch of the electric Golf by around nine months, the people said, asking to remain anonymous discussing confidential information.
Plans to move production of the existing combustion-engine Golf to Mexico have been delayed as a result, they added. The timing of the launch of the electric version of the T-Roc has also been affected, one of the people said. Volkswagen declined to comment.
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Under a landmark restructuring deal last year, Volkswagen executives and labor leaders agreed to shift production of the Golf hatchback from Wolfsburg to Mexico as early as 2027 and add EVs to the plant’s output. The measures are aimed at saving the company around 4 billion euros ($4.7 billion) a year as it battles a sales slump in China and slowing EV demand in Europe.
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But budget pressures mean the costs of new production technology for making the two battery models in Wolfsburg need to be deferred to a later spending period. Handelsblatt newspaper earlier reported the model delays.
Pushing back the battery-powered Golf — which was expected in 2029 — gives Chinese rivals led by BYD Co. more time to accelerate their European expansion and grab more of VW’s market share in the region. These brands have capitalized on a lack of more affordable EVs from European manufacturers, which have struggled to produce less expensive electric models due to their higher production costs.
VW’s plan to compete with new Chinese entrants includes the launch of four entry-level electric cars beginning in 2026, with starting prices of around 25,000 euros. The concept cars were presented during this week’s Munich car show.
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The delayed factory revamp comes as tensions run high among factory workers in Wolfsburg, where technical errors and equipment failures are bringing production lines to a standstill, the people said. It’s a blow for staff who had been brought in for night and weekend shifts to meet customer demand. Output could fall by as many as thousands of units a week for the rest of the year, one of the people said.
Volkswagen is sketching out its budget plan that runs from 2026 until 2030, which includes several key investment and production decisions. A small portion of the estimated 160 billion euro budget could be earmarked for repairing the technical issues in Wolfsburg, one of the people said.
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