The Electric Vehicle Mandate Is Choking Volkswagen

Volkswagen workers launched rolling two-hour strikes last week at nine plants across Germany to underscore their resistance to pay cuts and factory closures the company says are necessary to cope with a slack European auto market.

Why is this important to the US and Volkswagens auto sales. This is more than a warning this is very concerning. Volkswagen is warning of layoffs globally, factory closings and even its overall survival.

What is the culprit, it is the electric vehicle mandate. Volkswagen argues that it must lower costs in Germany to levels to compete with their competitors and by lowering costs in Volkswagen plants in eastern Europe and South America.

The so-called warning strikes from employees is a common tactic in German wage negotiations said the IG Metall industrial union, much like the US UAW union.

VW Group is demanding a 10% pay cut for 120,000 German workers and has said it can't avoid shedding factory capacity that is no longer needed. Employee representatives say the company has proposed closing three of its German plants.

Higher costs and increasing competition from Chinese automakers has hurt the German car manufacturer. Volkswagen built factories to supply the European car market of vehicle sales to 16 million vehicle sold annually, but now faces demand for around 14 million, that’s a big drop off.

How is the EV mandate hurting VW and other brands. It may shock you.

VW has been forced to make cars that consumers aren’t willing to pay for, the all EV mandate has been painful. This was their own fault after the dieselgate debacle.

Where are we know, President Trump will end the EV mandate. It has now reached the end of the road.

The Volkswagen Group includes numerous car brands sold in different regions of the world, its namesake VW brand: Skoda, Seat, Audi, Porsche, Lamborghini and Bentley.

The problem is that governments from China to Europe to the US have decided that they will force the automotive market, against the will of automakers and consumers, to manufacture and buy only pure electric vehicles starting in the coming years. The tools they have employed to achieve this coercive goal include raising the cost of gasoline cars through purchase taxes; raising the price of gasoline taxes; incentivizing EV ownership with HOV lanes, free parking, lower fees and subsidizing EVs with tax credits, rebates. Some countries and cities are even banning gasoline cars from city centers.

The problem with those measures is that they are either expensive and can be unpopular. Governments around the world are facing ballooning deficits and subsidizing electric cars to the tune of many thousands of dollars per vehicle sold has become more than a political problem.

Is there an outcome in the EV mandate situation that would be positive for Volkswagen? The factor that is crippling Volkswagen’s sales numbers and profitability is that the European and US EV mandates are forcing VW to sell an increasing mix, eventually reaching 100%, of its cars produced as strictly battery-electric vehicles (BEVs).

The EV mandate is on the cusp of becoming an even more detrimental economic catastrophe for the European car industry. Hence Volkswagen’s recent warnings about factory closings, layoffs and potential non-survival within as little as 1-2 year from now. Now all of this is becoming a reality.

The car industry has been suffering with subpar profitability for many years. Volkswagen is sounding the alarm more than it has ever done before, this is their reality.

It should be a lesson for the US as well. Watch how the EV mandate is close to ending the storied VW Group. Other automakers are not far behind we have talked about Stellantis, Nissan and others.

As the US will lift the electric vehicle mandate, we hope other countries will follow or the what we are seeing today could be the collapse of many other carmakers. This will impact world economies and no company will be immune.

If you think, who cares what’s the big deal well this will impact the world economy not just a company it will impact you. It’ll impact your local communities removing the mandates is the smartest choice. It’s the smartest economic, move and consumers can buy what they want, buy from different brands and brands will build vehicles with a profit and that gives jobs everyone a better economy. We will be continuing to cover the auto industry, the pluses and the minuses.

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