It’s been a strange and unpredictable year for electric vehicle sales in America and, frankly, for new car sales in general. But if you want to assess the European market, replace the adjectives above with “apocalyptic”. Intense competition from China, a weak economy, slowing demand for electric vehicles due to evaporating subsidies and high interest rates have all put the European auto industry in a dismal situation. We now know the extent of the budget cuts that Volkswagen management wishes to make, and they are unprecedented.

This kicks off the Monday edition of Critical materialsour morning round-up of the essential news in the field of technology and mobility. And if you join us, then yes, Inside electric vehicles looks different today. (And yes, it looks better, I agree.) Check out my announcement message if you haven’t already, let’s move on to some news.

30%: Volkswagen prepares for potentially huge job cuts and factory closures

Since its rebirth at the end of World War II, Volkswagen has never closed an auto plant, aside from its ill-fated experiment in Westmoreland, Pennsylvania, in 1988. It may soon attempt to close three in Germany alone , due to high labor costs. slow sales and strict regulations that drive adoption of electric vehicles are starting to take their toll.

Reuters reports today that the head of the automaker’s works council has warned VW workers that a “deeper overhaul than expected” is coming for the struggling automaker as it struggles to reduce its costs. Tens of thousands of jobs could be lost, up to three factories could be closed and a job security program in place since the 1990s will end.

It’s unclear which plants would be affected, but the measures are drastic no matter how you want to look at them:

Europe’s largest automaker has been negotiating with unions for weeks over plans to restructure its operations and cut costs, including considering closing factories on its territory for the first time, which would deal a blow to the company’s industrial prowess. ‘Germany.

“Management takes all this seriously. This is not saber rattling in the round of collective bargaining,” Daniela Cavallo, chairwoman of Volkswagen’s works council, told employees at the automaker’s largest plant , in Wolfsburg, by threatening to break off the negotiations.

“This is the plan of the largest German industrial group to carry out sales in its home country, Germany,” Cavallo added, without specifying which factories would be affected or how many Volkswagen group employees in Germany , of the approximately 300,000, could be made redundant.

Volkswagen said in a statement that it would make proposals on how to reduce labor costs on Wednesday, when workers and management meet for the second round of wage negotiations and the automaker reports its third-quarter results.

“The situation is serious and the responsibility of the negotiating partners is enormous… Without comprehensive measures to regain competitiveness, we will not be able to afford essential investments in the future,” said Gunnar Kilian, board member of administration of the Volkswagen group.

So why is all this happening? Demand for cars in Europe is generally weak, as the continent has faced a more difficult post-Covid economic recovery than that of the United States. Chinese automakers are eating away at VW’s market share at home, and within China itself, buyers are increasingly turning to local brands. Subsidies intended to encourage the purchase of electric vehicles in Germany have largely disappeared, and so high costs discourage buyers from taking that route. Globally, VW’s electric vehicle sales are down nearly 10%, including 40% in the United States, and total global car deliveries fell 7% in the third quarter.

Other than that, everything seems fine.

Reuters also reports that Germany’s most powerful union, IG Metall, has identified some potential candidates for factory closures. These include the Brunswick plant which manufactures various components and batteries for electric vehicles; the Emden factory which manufactures the Passat and ID.4; the Hannover plant which makes vans and minivans; and a few others. In Germany alone, around 300,000 people work for VW. But that’s part of the problem, said Thomas Schaeffer, CEO of the VW brand: “Currently we don’t make enough money from our cars. At the same time, our costs for energy, materials and personnel have continued to rise. This calculation cannot work in the long term, so we have to tackle the root of the problem: we are not productive enough at our German sites and our factory costs are currently 25-50% higher than what we had planned. This means that individual German factories are twice as high. expensive than the competition.”

And as these articles point out, these potential closures have profound implications for the European economy, next year’s German elections and the global transition to electric vehicles as a whole. But it’s becoming increasingly clear that if VW doesn’t change the way it operates, it may not be around to see the other side of this transition.

60%: GM backs down as Canada considers ending electric vehicle subsidies

Photo by:

Photo by: InsideEVs

2024 Chevrolet Equinox EV 3RS

The question remains as to how long governments should incentivize the purchase of electric cars. If you do them too long, it is said, you will excessively subsidize a private market. Remove subsidies too soon and you would kill electric vehicle sales just as they are about to take off and make it harder for automakers to meet their aggressive emissions and fuel economy targets at the same time. ‘future. Germany and other European countries have removed subsidies in recent months and the effect on electric vehicle sales has been palpable.

So naturally, General Motors isn’t happy that governments in Canada – where several provinces are doing very well when it comes to electric vehicle adoption – are also considering removing subsidies. Canada has deficits to resolve, so these incentives could be offered, Bloomberg reports:

Currently, some consumers can get up to C$12,000 ($8,673) off the price of an electric car. Federal rebates deduct up to CA$5,000, while the province of Quebec pays up to CA$7,000 and British Columbia offers a maximum of CA$4,000.

But government officials, facing large budget deficits, are now curbing the use of taxpayer money. In March, Quebec announced it would phase out the subsidies by 2027. In June, British Columbia significantly reduced the availability of its rebate, citing “available funding” and faster-than-expected sales growth of electric vehicles.

Meanwhile, the Canadian government has set an aggressive goal of phasing out gasoline-powered vehicles.

It requires all new light vehicles sold by 2035 to be electric or plug-in hybrids. There are interim targets of 20% by 2026 and 60% by 2030. Under Canada’s proposed system, automakers get compliance credits for electric vehicle sales and investments in infrastructure, but incur deficits if they fail to achieve their objectives. Some provinces have their own targets – British Columbia threatens manufacturers with financial penalties for shortfalls.

“Just as mandates and regulations are starting to kick in, it’s not necessarily a great time, as purchase incentive support is ending,” said GM Canada president, Kristian Aquilina, in an interview with Bloomberg News in Vancouver. “It will have to have an impact. So we cannot ignore it.

As this article points out, Ontario canceled its consumer rebate in 2018. But other provinces like Quebec and British Columbia have aggressive programs to get people to go electric and now, sales of GM’s electric vehicles in Canada reached a very impressive rate of 12.5% ​​in the third quarter. But if the Conservative Party of Canada wins the next election, these subsidies could be particularly at risk.

90%: Waymo raises funds

Photo by:

Photo by: Waymo

Finally, some good news for fans of robotaxi services: you may soon see more of them in your city. Google’s Waymo division just raised an additional $5.6 billion, CNBC Reportsintended for expansion efforts:

In a statement to CNBC, Waymo co-CEOs Tekedra Mawakana and Dmitri Dolgov said the funding would be used to expand and advance the Waymo pilot for commercial applications.

“With this latest investment, we will continue to welcome more riders to our Waymo One rideshare service in San Francisco, Phoenix and Los Angeles, as well as Austin and Atlanta through our expanded partnership with Uber,” they wrote .

The Series C funding brings Waymo’s total capital raised to more than $11 billion after raising $3.2 billion and $2.5 billion in two previous rounds. Ruth Porat, Alphabet’s chief financial officer, announced in July that the parent company would commit to a multi-year investment of up to $5 billion in Waymo.

100%: How is Volkswagen overcoming this crisis?

Volkswagen identifier. Buzz on the Greek island of Astypalea

What’s your solution to VW’s woes in China, and what do they mean for the rest of the industry?

Contact the author: [email protected]