Volkswagen has set out plans to transform its Transparent Factory (Gläserne Manufaktur) in Dresden into an innovation campus focused on future technologies, marking a strategic shift for the site as vehicle production is phased out.
Under a letter of intent signed with the Free State of Saxony and the Technical University of Dresden (TU Dresden), the German carmaker will make large parts of the facility available for academic and industrial research. The initiative will focus on key technology areas including artificial intelligence, robotics, microelectronics and semiconductor design.
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Volkswagen said the partners plan to invest more than 50 million euros ($54.6 million) over seven years into research, technology development and the creation of four new endowed professorships. The agreement remains non-binding for now, with outstanding details still to be finalised, including the precise allocation of costs.
The current assembly line for the all-electric ID.3 is scheduled to halt production in January 2026, while preparations for the conversion of the facility will begin in parallel. First joint research projects with TU Dresden are expected to start by mid-2026, with full-scale operations at the innovation campus targeted for 2027. Volkswagen said the site will also continue to function as a vehicle delivery centre and experience hub, with about 3,500 vehicles delivered to customers in 2025.
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The transition raises questions about employment at the site, where around 230 staff remain. Volkswagen said all employees will initially retain their jobs from early 2026, with workforce reductions expected mainly through retirements. The company said it is offering transfers to other plants, partial retirement schemes and termination agreements where necessary.
“The decision to end vehicle production at the Gläserne Manufaktur after more than 20 years was not an easy one. However, from an economic perspective, it was absolutely necessary,” said Volkswagen brand chief executive Thomas Schäfer, adding that the new concept provides a long-term future for the site.
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Saxony’s Minister President Michael Kretschmer said the partnership marked a strategic shift for the region’s industrial base. “The realignment of the Gläserne Manufaktur will not only create an innovation campus of national significance—we are also sending a clear signal about our state’s ambition to be at the forefront of future technologies,” he said.
The Dresden restructuring forms part of Volkswagen’s wider “Future Volkswagen” programme, under which the company aims to cut German production capacity by more than 730,000 vehicles per year by 2028 and reduce its workforce by about 35,000 jobs by 2030 through socially responsible measures.