Volkswagen halts US EV production due to 'unpredictable' market

Volkswagen is focusing more on gas-powered SUVs in the US.

On Thursday, the German car manufacturer announced it would stop producing the electric ID.4 crossover SUV at its Chattanooga, Tennessee, plant by mid-April.

This means Volkswagen's sales of electric vehicles in the US will depend solely on current stock. 

A representative confirmed that no ID.4s are imported into the US by the company.

"The electric vehicle market continues to challenge the industry, necessitating careful decisions over the past few years to address this volatility," Volkswagen said in the press release.

Instead, VW reported the Tennessee plant will now concentrate on manufacturing "higher-volume" models, such as the revamped 2027 Atlas SUV, which the company revealed before last week's New York Auto Show. 

The SUV will commence production this summer, reaching dealerships by fall.

This strategy change also highlights a wider pullback in Volkswagen's electric vehicle plan for the US.

The ID.4 was once integral to Volkswagen's electric goals. When it was first introduced globally in 2020, the company saw it as a pivotal move beyond traditional gas-powered vehicles. 

They also wanted to bring more electric models, such as the ID.7 sedan, to the US. However, the sedan's US launch was later abandoned.

Although the Tennessee plant will stop production of the ID.4, the company mentioned 2026's crossover EV will still be "available through current inventory," which should last into 2027.

This mirrors a plan the automaker discussed in December, when it decided against bringing the 2026 ID. 

Buzz EV to the US, due to lower-than-expected demand. Instead, it noted existing inventory would suffice for sales until an updated version arrives next year.

Both models are expected to return to US dealerships in 2027 featuring new enhancements.

Volkswagen has seen more victories with electric vehicles in Europe, where it emerged as the leading electric car brand in 2025, overtaking Tesla.

In contrast, electric vehicles haven't yet become a significant growth driver in the US. 

The ID.4 recorded sales of 22,373 units in 2025, a 31.4% increase from the previous year, being the only ongoing SUV model in Volkswagen's range to see gains. Still, it ranked fifth among the company's six SUVs in sales.