Volkswagen Cuts U.S. Production Amid Slumping Sales; Chattanooga Plant to Lay Off Workers
The Volkswagen ID.4 could be pulled from production in 2026.
Volkswagen is facing major headwinds in the U.S. market. Sales of the 2026 ID.4 electric crossover fell 19% in the first half of 2025, with the second quarter plunging 65% year-over-year. As a result, the German automaker has scaled back ID.4 output at its Chattanooga, Tennessee plant. Starting in late October, 160 workers will be let go, though they will receive 80% of their normal pay along with full benefits as part of a support package.
The ID.4 was originally positioned as a strong rival to the Tesla Model Y, but demand has fallen far short of expectations. Volkswagen stresses that the production cut doesn’t signal an exit from EVs or the ID.4 lineup, but rather an adjustment to actual market conditions.
Other models built in Chattanooga—the Atlas and Atlas Cross Sport—will continue to be produced at current volumes. Still, the numbers explain the company’s move: just 17,000 ID.4s were sold in the U.S. in 2024, compared to about 38,000 the year before. Under those conditions, maintaining previous production levels has become economically unsustainable.
You may also be interested in the news:
A Real 1970 GTX Sat Under a Carport for 45 Years—Then Rescuers Found Its Holy Grail in the Back Seat
The 440 Six Barrel GTX sat untouched for 45 years, its factory broadcast sheet still hidden beneath the rear seat.
Volkswagen to Shut Down SEAT as the Brand Turns 80
Volkswagen will shut down the SEAT brand. The German automaker has made a final decision to close the Spanish brand.
Mansory Armors the Rolls-Royce Cullinan
The outrageous tuner has unveiled its Rolls-Royce Cullinan project, featuring B4 ballistic protection.
Toyota Names Reason for Delay of Its First EV Built for the U.S.
The Toyota Highlander EV, originally scheduled to enter production this fall, is now planned for Kentucky no earlier than January 2027. Toyota has already notified suppliers of the revised delivery schedule, while production of the Highlander hybrid has been extended through December 2026.
Volkswagen in Name Only: New ID.Unyx 09 Fastback Debuts With Chinese Tech
Volkswagen has unveiled another ID.Unyx fastback, combining Chinese technology with powerful electric motors and advanced driver-assistance features.