FRANKFURT -- Angela Merkel's visit to a revamped Volkswagen Group electric-car plant in Zwickau on Monday is a stark reminder of what is at stake both for the German chancellor and VW CEO Herbert Diess.
Merkel -- who critics say has long been soft on the auto industry -- has come under fire for failing to make more progress in curbing greenhouse-gas emissions, while Diess is attempting to manage the expensive shift to electric vehicles for the masses without ruining the automaker.
"This will mean a paradigm shift in mobility that has never been realized in automotive history," Merkel told a crowd of VW employees and grandees from Saxony on Monday.
The German government is prepared to undertake "great effort" to incentivize purchases of electric autos, including making them affordable to regular drivers, Merkel said. "It's important that we establish the policy framework anew," she said.
VW's ID3, which will arrive in showrooms across Europe next summer, "makes clean individual mobility accessible to millions of people and is a milestone for our company," Diess said at the event.
Merkel's visit to the factory in the eastern state of Saxony marks the production start for the VW brand's first mass-market vehicle based on a technology developed solely for battery-powered cars.
Customers have placed deposits for more than 35,000 cars. Success for the model, which starts at just under 30,000 euros ($33,500), is vital for the massive investment to pay off and safeguard jobs.
The chancellor's foray into eastern Germany comes just days after her Christian Democrat party slumped to a disastrous result in an election in the neighboring state of Thuringia, stoking fresh doubts about the stability of her ruling coalition in Berlin.
Voters have deserted her Christian Democrat-led bloc and her junior coalition partner, the Social Democrats, in droves amid gains for the far-right and environmentalist Greens.
For VW, the ID3 represents a first stage in its attempt to manage a transition away from the combustion engine without inflicting too much damage on its balance sheet, something no automaker has yet accomplished. The company targets selling 22 million electric models through 2028.
The Zwickau plant, which had been making Golfs and Passats, marks the traditional automaking industry's first site being switched directly to all-electric cars from combustion-powered models. The company plans to produce 100,000 vehicles at the plant next year.
"The production start of the ID3 ushers in a new era for Volkswagen -- one comparable to the first Beetle or the first Golf," Thomas Ulbrich, VW brand board member responsible for electric mobility, said in a statement. The factory is going "from 100 percent internal combustion engines to 100 percent electric drives."