Volkswagen is re-evaluating its plan to move Golf production from Germany to Puebla, Mexico, citing delays in its electric vehicle platform development, financial pressures, and labor concerns. The decision, announced last year as part of a deal with the company’s works council, is now under review.
Production Strategy in Flux
In December, Volkswagen announced the transfer of ICE Golf production from Wolfsburg, Germany, to Mexico in 2027. This move was intended to secure jobs at the German plant while streamlining production costs. However, the company’s Scalable Systems Platform (SSP) for EVs has faced development delays, creating uncertainty in its broader production roadmap.
Financial and Labor Pressures
The SSP delays have added financial strain on Volkswagen, which is already navigating a challenging economic climate. The company’s works council, representing its German workforce, has also voiced concerns about the production shift, leading to potential labor unrest.
Broader Implications
This pause in the Mexico plan highlights the growing tension between traditional ICE vehicle production and the transition to EVs. Volkswagen’s SSP is critical to its electric strategy, and any setbacks will ripple through its entire manufacturing network. The company is now reassessing whether the Mexico move remains viable given these uncertainties.
What’s Next?
Volkswagen will likely explore alternative options, including potentially keeping some ICE production in Germany or delaying the shift altogether. The final decision will depend on the SSP’s progress and negotiations with the works council.
The pause in the Mexico plan underscores the complexities of shifting to EVs while managing existing ICE production. Volkswagen’s situation reflects a broader trend in the auto industry, where manufacturers face financial, logistical, and labor challenges as they navigate the electric transition
