The failure of the electric vehicle battlefield is not only the Volkswagen Group that is considering closing its factories, but also the automobile empires established by France and Germany over the past century are now facing the crisis of total collapse.
With centuries of advantages, European car manufacturers are facing a crisis of "death on comfort". They have long ignored their lack of competitiveness and overcapacity. Volkswagen Group may close its factories in Germany and plan layoffs. All of this is caused by "electric vehicles". "Car Revolution". It took hundreds of years to establish the hegemony of experience, technology, and supply chain. Facing the impact of electric vehicles from China and Tesla, European car manufacturers are unable to resist.
"Volkswagen has finally discovered how serious the situation is. In the increasingly complex global geopolitical relationship, Europe has almost no winning side." said Harald Hendrikse, an automotive industry analyst at Citigroup. Data show that European car sales are still lower than before the epidemic, but more than 30 factories of automakers including Volkswagen, Renault and Stellantis are operating at a loss.
We are the cowboys who build electric cars in Europe, the pioneers who blaze the trail," said Maurizio Sabatino, a senior employee at the Volkswagen Group's Brussels plant. The charge turned into a catastrophe. The Brussels plant witnessed all the prosperity of Volkswagen after World War II. It produced the Volkswagen Beetle in the 1950s, and was later responsible for the production of popular models such as Golf and Passat. It was later upgraded to an Audi production line to produce the Audi Q8 e-tron to compete with Tesla. Alas, the disaster begins here.
The high-priced Audi electric cars are not as good as Tesla in terms of performance. They are even further behind competitors in terms of software. What’s even worse is that they are behind at the starting point and cannot catch up with their competitors’ OTA update speed. The gap is getting wider and wider. Next, a picture that is unimaginable for European car manufacturers appeared. In the European automobile production center less than 15 minutes' drive from the EU headquarters, Chinese electric vehicles have begun to appear on the streets around the Brussels factory. MG and BYD have made counterattacks on the European market, alarming car manufacturers, governments and the European Commission. Loud noise.
In July 2024, Fox announced that it was preparing to close the Brussels plant, revealing the seriousness of the problem. High costs, sluggish demand and difficult to solve software problems forced Fox to make the most difficult decision. Closing a factory with 3,000 employees is far more complicated than laying off 3,000 employees. It involves an economic impact on the entire city, from the parts factory to surrounding bakeries and even cleaners. Not only the CEOs of Volkswagen and Audi participated in the discussions related to the closure of the factory in Brussels, but also the Brussels market and Belgian Prime Minister Alexander De Croo, hoping to find other solutions.
"The economic environment is getting worse day by day, and competitors are constantly approaching." Oliver Blume, CEO of Flowserve Group, said that from the perspective of running a business, Germany has fallen further and further behind in terms of competitiveness, and they must take active measures to change the current situation. .
Fox originally planned to reduce costs through early retirement or preferential separation plans, but according to its first-half financial report, it was unable to achieve its goal of saving 10 billion euros in costs by 2026. It must consider large-scale layoffs or close the factory in its hometown in Germany. .
The German government and labor union representatives have come forward to hope that Volkswagen will consider alternatives. This is likely to lead to the two sides discussing two possibilities. Either Volkswagen will close the factory and lay off employees, or the German government will have to propose a subsidy plan to stimulate demand. This also involves changes in the political situation. In the just-concluded parliamentary election in eastern Germany, the far-right Alternative for Germany won a big victory, and the pro-Russian new party BSW quickly emerged as the third largest winner. This shows that under the changes in the economic environment, the people It seems to be more inclined to the right-wing parties with a hard-line style, which may be good news for automakers that want to cut jobs to save costs or seek more subsidies.
