Volkswagen Production Lowest Since 1958 Due To Chip Shortage

Volkswagen is one of the biggest automakers in the world. Its complete portfolio of brands includes Audi, Lamborghini, Bentley, Porsche, and Volkswagen itself. Despite continuing to deal with the fallout from the “dieselgate” scandal, Volkswagen vehicles remain in high demand. However, due to the global chip shortage, the German automaker is struggling to meet said demand.

Volkswagen’s main plant produces the fewest cars since 1958 due to chip shortage

A Volkswagen Golf 8 being assembled in the Wolfsburg plant. The plant has seen a significant decrease in production due to the global chip shortage affecting the supply chain.
Volkswagen Golf 8 assembly | Volkswagen AG

The Wolfsburg plant is the biggest production facility Volkswagen owns and has pushed out millions of cars over the decades. However, due to the coronavirus (COVID-19) pandemic and the global chip shortage, the storied factory has produced far fewer cars than usual.

According to a Reuters report, the Wolfsburg plant has only produced 300,000 vehicles thus far in 2021. A company source told Reuters that it is the lowest production figure since 1958 and much lower than pre-pandemic production numbers.

The Wolfsburg plant builds the Golf, Tiguan, vehicles from the Seat brand, and others. Before the pandemic and the semiconductor shortage, the plant produced an average of 780,000 vehicles per year. In 2018 Volkswagen vowed to try and push the plant’s output to a million cars per year.

Volkswagen was unable to keep that promise for obvious reasons.

Under 500,000 vehicles were produced by the Wolfsberg plant in 2020, and it appears that the final production figures for 2021 could be even less.

With an inconsistent supply chain due to COVID-related shutdowns and shortages of electronic components, automakers are scrambling to figure out a solution to curb the financial damage caused by reduced production.

Volkswagen electric vehicles may be the answer

Elon Musk calling into a meeting with VW executives via video to discuss Volkswagen EV production
Elon Musk speaking at VW executive meeting | Herbert Diess Twitter page

Despite being the automaker’s largest plant, the Wolfsburg facility currently does not produce battery electric vehicles. Volkswagen CEO Herbert Diess recently urged the company’s executive leadership to quickly decide on producing Volkswagen electric vehicles as soon as possible.

In a recent corporate meeting, the CEO warned that slow movement to volume EV production could cost the automaker 30,000 jobs and make Volkswagen increasingly vulnerable to EV market leaders such as Tesla.

To prove his point, Diess surprised his executive group by having Tesla CEO Elon Musk join in on the meeting via video to directly speak to Volkswagen executives about how Tesla is able to move nimbly to keep the brand competitive. Including how the EV maker avoided the chip shortage.

Volkswagen electric vehicles could earn back some goodwill

The Volkswagen ID4 is one of the company's first EVs. However the VW CEO warns that the brand needs to switch to 100% EV production as fast as possible.
Volkswagen ID.4 | Volkswagen AG

It is no surprise that Volkswagen’s CEO is in a hurry to move to battery electric vehicle production. The automaker has not had much luck with internal combustion engines in recent history. Many of you reading this probably remember the “dieselgate” debacle from 2015.

To the unaware, in 2015, the news broke that authorities learned Volkswagen engineers were illegally modifying the emissions software on its diesel vehicles to pass emissions standards test.

Once authorities discovered the fraudulent activity, Volkswagen faced a litany of lawsuits and shouldered a buy-back program, the combination of which cost the company billions. Even today, Volkswagen is still paying out settlements to state governments over the emissions scandal.

A complete shift to zero-emissions vehicles might significantly improve the automaker’s brand image in the face of its past controversies. It just needs to navigate the global chip shortage first.

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