December 20, 2025 – Volkswagen’s cost – cutting initiatives are making notable headway, as reported by Reuters. On Thursday local time, Thomas Schäfer, the CEO of the Volkswagen brand, announced that a series of measures, including workforce adjustments and cost control at German factories, have started to yield results. For instance, the costs at three factories in Wolfsburg, Emden, and Zwickau have dropped by an average of 30%.
Schäfer also revealed that around 25,000 employees have signed agreements for early retirement or severance packages. “We still have room for improvement, but we hope to jointly prove that it’s possible to develop and manufacture competitive cars in Germany,” he said.
In December 2024, Volkswagen reached a restructuring agreement with labor unions, planning to cut 35,000 jobs in Germany by 2030. This move is aimed at addressing the price pressure from Chinese automakers and the slower – than – expected progress of electrification.
In a related development, the European Commission lifted the strict deadline of a complete ban on the sale of internal – combustion engine vehicles by 2035 this Tuesday. Previously, automakers like Volkswagen had called for greater policy flexibility.
Regarding product planning, Schäfer ruled out the possibility of continuing to offer gasoline – powered options in the new generation of small – car series under Volkswagen’s core brand. The first model in this series, the ID.Polo, is expected to hit the market next year with a starting price of around 25,000 euros.
Schäfer emphasized that under the constraints of emission regulations, the cost of gasoline – powered models is too high, making them unsuitable for consumers. “The future of this market segment lies in electrification,” he pointed out.
