Volkswagen Feels Pressured By Tesla In The Electric Car Race And May Lay Off 30,000 Employees

After Pressure from Tesla, Multinational Volkswagen May Lay Off Up to 30,000 Employees Due to Modernization of Its Plants to Accelerate Electric Mobility

According to a report published by the German newspaper Handelsblatt, Volkswagen CEO Herbert Diess wants its main factory to be converted to produce only electric cars and suggests cutting up to 30,000 jobs, which surprised and vigorously protested the supervisory board members. Pressure from Tesla would be one of VW’s main concerns.

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“There is no doubt that we have to address the competitiveness of our factory in Wolfsburg in light of new market entrants. The debate is ongoing, and there are already many good ideas. There is nothing concrete about layoffs,” said VW’s Head of Communications, Michael Manske, when questioned on the matter.

Volkswagen Plans to Invest in Batteries and Charging Stations

Volkswagen is also considering investing in energy and car charging businesses, in addition to existing IPO plans for its battery division. Schmall stated that nothing has been decided yet and that it will likely take up to two years for the new companies to be established and truly market-ready.

“We also have to think in terms of overall systems and rush to create our own charging network, solar systems for green charging stations, and reduce carbon emissions,” Schmall said, referring to the pressure from Elon Musk’s automaker, Tesla.

In a meeting of Volkswagen’s supervisory board at the company’s headquarters in Wolfsburg (Germany), CEO Herbert Diess stated that the automaker could lose 30,000 jobs if it made a very slow transition to electric vehicles, according to a report by Reuters. Tesla produces its Model 3 car in 10 hours, while Volkswagen takes 30 hours to make an ID.3.

Michael Manske, VW’s Head of Communications, issued a statement today, saying: “There is no doubt that we have to address the competitiveness of our factory in Wolfsburg in light of new market entrants,” highlighting Tesla and Chinese automakers, such as NIO, which recently launched electric cars in Norway.

Tesla Sets New Standards Within the Automotive Industry

Manske added: “Tesla is setting new standards of productivity and scale in Grünheide.” He referred to Tesla’s first Gigafactory in Europe, which is being built near Berlin. When operational, the facility is expected to have the capacity to produce between 5,000 to 10,000 cars every week, which alone is more than double the total production of electric cars in the country last year.

Denouncing the job cut report published in Handelsblatt today, Manske said: “A debate is ongoing, and there are already many good ideas. There are no concrete scenarios.” The Volkswagen Works Council also denied such reports, calling it “absurd and baseless.”

The Volkswagen factory in Wolfsburg is the largest in the world. It currently has over 50,000 employees manufacturing ICE vehicles. Volkswagen aims to produce the electric sedan Project Trinity from this facility starting in 2026, for which it must undergo modifications.