VW is cutting production of the ID3 and Cupra Born due to weaker demand

FRANKFURT -- Volkswagen will suspend production of VW ID3 and Cupra Born battery-electric cars at its Zwickau and Dresden plants in Germany in the first two weeks of October due to weaker demand.

Due to the current market situation, production will be reduced during the autumn holidays in Saxony from Oct. 2 to Oct. 13 at VW's Zwickau plant, a company spokesperson said on Tuesday.

One of the two production lines will be shut down temporarily at the Zwickau factory. Production of the ID4, ID5, Audi Q4 e-tron and Audi Q4 Sportback e-tron models will continue, VW said.

Production of the ID3 in Dresden will be suspended from Oct. 2 and will resume on Oct. 16.

All the ID models built at Zwickau and Dresden are underpinned by VW Group's MEB electric architecture.

VW declined to comment on the number of employees affected. The automaker said earlier this month that it would not extend the fixed-term contracts of 269 employees at its all-electric Zwickau plant.

The appetite for EVs in Europe has been held back in recent months by higher energy, living and borrowing costs, as well as consumer concerns about charging infrastructure and battery range.

VW is facing rising competition from Tesla and a growing array of Chinese automakers such as MG,  whose MG4, a VW ID3 rival, is rising up the sales charts.

The German government's decision to end subsidies for electric cars in company fleets led to a 171 percent increase in new EV registrations in August compared to the previous year, according to Germany’s VDA auto lobby. Industry analysts expect EV sales to slow down for the rest of the year and remain flat.

Next year EV sales will be flat and will only return to rapid growth after 2025, according to Matthias Schmidt, who tracks the Western Europe electric vehicle market for Schmidt Automotive Research.

• Read Automotive News Europe's analysis of the region's EV market here.

Bloomberg contributed to this report