VW cancels Dresden car manufacturing, pivots to chips, AI

Volkswagen is terminating car manufacturing in a German metropolis in spite of everything, signing a letter of intent with the Free State of Saxony and Technical College of Dresden to transform its Clear Manufacturing unit into an innovation campus targeted on AI, robotics, microelectronics and chip design. The general public-private partnership will make investments greater than €50m (US$58.2m) over seven years, with TU Dresden finally utilizing practically half the ability house.

ID.3 manufacturing in Dresden will stop as of January 2026 when the constructing undergoes conversion; first joint analysis tasks will observe round mid-2026 with common operations kicking off in 2027. The ability shall be absolutely transformed right into a supply and analysis website, having delivered roughly 3,500 autos throughout 2025 as Volkswagen’s second-largest German handover website.

In a transfer more likely to satiate native unions and the works council, all 230 remaining staff will preserve their Dresden positions in the course of the transition; nonetheless these numbers will decline by means of pure attrition (retirements, and so forth) within the coming years. Employees whose roles are phased out can even obtain switch affords to Zwickau and Chemnitz websites, partial retirement schemes or termination agreements, with transfers to the Wolfsburg plant additionally accessible alongside €30,000 relocation bonuses.

The Dresden closure varieties one a part of Volkswagen’s ‘Future Volkswagen’ programme concentrating on German manufacturing capability discount of some 730,000 autos yearly by means of 2028 and 35,000 ‘socially accountable’ job reductions by 2030. “The choice to finish car manufacturing on the Gläserne Manufaktur after greater than 20 years was not a simple one,” mentioned Model Govt Thomas Schäfer. “Nevertheless, from an financial perspective, it was completely needed.”

The Dresden facility opened in 2001, initially producing the Phaeton luxurious sedan till 2016 when it switched to the e-Golf and subsequently ID.3 electrical fashions. The location assembles roughly 6,000 items yearly, marking it as extra showcase-oriented than a full-scale manufacturing facility, with manufacturing prices among the many highest worldwide.

Saxon Minister President Michael Kretschmer has characterised the event as a turning level for the area’s industrial place. “The realignment of the Gläserne Manufaktur is not going to solely create an innovation campus of nationwide significance—we’re additionally sending a transparent sign about our state’s ambition to be on the forefront of future applied sciences,” Kretschmer mentioned. The town goals to function a hub for Europe’s semiconductor trade, with tasks from Bosch, Infineon and TSMC additionally underway.