Volkswagen Suspends Production Of ID.3 And Cupra Born For The Rest Of 2023

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The Volkswagen brand has been experiencing some production challenges in the latter part of 2023. While sales of electric and plug-in hybrid cars from the rest of Volkswagen Group have been on the rise according to a recent report from my colleague José Pontes, things at the parent brand have been turbulent.

First, as we reported a month ago, production of the ID.4 and ID.5 was halted for several weeks because of a lack of electric motors. Volkswagen has come up with a new motor, known as the APP 550, that has significantly more grunt than the motor that powered those cars initially. The company said its new APP 550 powertrain will improve the performance of its rear wheel drive electric cars while adding range, thanks to its newfound efficiency.

Volkswagen APP 550

Karsten Bennewitz, head of powertrain and energy systems, said in a company press release, “Because the available space has not changed, we were compelled to develop a new drive that achieves significant improvements in performance and efficiency in spite of being subject to the same constraints. That was a great challenge for the team of Technicalid 4 hp Development and Group Components. The result shows that we were able to reduce the use of raw materials, while at the same time achieving a considerable increase in vehicle efficiency.”

In addition to more power — 210 kW (280 hp) — the APP 550 powertrain also has more torque, up to 550 Nm (405 lb-ft) depending on the vehicle’s gear ratio.  The original motor produced only 150 kW (201 hp) and 310 Nm (229 lb-ft). The significantly higher torque provides superior power both from a standstill and at higher speeds, thanks to an enhanced stator with a higher effective number of windings and a larger wire cross section. The rotor is equipped with more powerful permanent magnets that give it a higher load capacity. The drive was also reinforced to withstand the greater torque.

A newly developed inverter is able to supply the higher electrical current needed for greater power and efficiency. It acts as the controlling “brain” in the powertrain whose software ensures efficient system processes. This applies to the clock frequencies and the modulation methods for generation of the alternating current for the electric drive motor, which allows the drive motor to operate more efficiently under various load scenarios.

More power and higher current mean more heat. In order to increase the efficiency of the electric drive unit, Volkswagen optimized a number of components in the powertrain, including the thermal management system. The APP 550 has an energy saving cooling system that operates without an electrically driven oil pump. The gear wheels of the gearbox and specially formed components for oil supply and distribution allow heated oil from the drive system to be cooled by the vehicle’s coolant circuit. The outside of the stator is equipped with a water-cooled heat sink.

The drive system with gearbox, rotor, and stator will be produced at the Volkswagen Group Components plant in Kassel, Germany. Alexander Krick, head of e-drive technical development, said, “We have been developing electric drive motors and their gearboxes for 15 years now and have also been producing them here at our location for over 10 years.”

Product and process innovations in the electric drive motor and gearbox result in a significant increase in efficiency and performance, Krick added. “Drawing on our many years of experience, we optimized the overall system through, among other things, the use of special electrical sheets and customized machining processes, and were thus able to significantly increase efficiency.”

Supply Falls Behind Demand

The problem was, the Kassel factory was unable to produce enough of the new motors to meet the demand, and so Volkswagen decided to use the units available to power the new ID.7 and shut down ID.4 and ID.5 production for a few weeks until the Kassel factory could catch up. Now the ID.4 and ID.5 are back in production with the new motors installed but demand has softened for the ID.3 and Cupra Born, which has led Volkswagen to suspend production of those two models at Zwickau and Dresden until the end of this year.

The lack of demand could have something to do with customers not wanting the less powerful powertrain, knowing that a more powerful one might be available in a few months. In any event, demand for the VW ID.3 and the Cupra Born is apparently too low for the current production capacities and so the decision has been made to cancel production through the end of the year. This affects both the factory in Zwickau and the one in Dresden. The third shift at the VW ID.3 and Cupra Born production plant in Zwickau had already been cancelled previously.

Job Cuts At Volkswagen

Automobilwoche (paywall) reporta that the job cuts at the Zwickau factory will continue into 2024. According to a spokesperson, the contracts of almost 500 temporary employees will not be extended in the coming year. The contracts of 269 employees have already expired this year. Further job cuts will depend on demand.

German news site MDR quotes from an article on the VW intranet in which VW brand boss Thomas Schäfer warns the workforce of “noticeable cuts.” The letter, which announced a works council meeting for this week, states that critical issues must be addressed, including personnel.

Meanwhile, work on production line two in Zwickau, which was interrupted due to a lack of electric motors, is starting up again this week after an interruption of about three weeks. The ID.4 and ID.5 from Volkswagen and the Q4 e-tron and Q4 Sportback e-tron from Audi are manufactured on that line.

The Takeaway

The mainstream media — and the looney tunes on the far right — have been rubbing their hands in glee and falling all over themselves to be the first to report that the EV revolution is over and gas cars won. Not so fast, hydrocarbon breath! The market for plug-in vehicles in Europe was up 24% YOY in October and shows no signs of cooling down,

Volkswagen faces competition from Chinese car companies like BYD and MG in Europe. It perhaps must be said that the ID.3 and Cupra Born are simply not competitive with their Chinese rivals — a bitter pill for mighty Volkswagen to swallow. The ID.3 has been plagued with software glitches since it first went into production, which have caused heads to roll at Volkswagen headquarters, including that of Herbert Diess. The company faces the daunting prospect that the ID.3 simply is not a compelling electric car. How Volkswagen gets itself out of this situation is certainly not clear at this point.