Volkswagen AG will temporarily halt production of its ID.4 electric SUV at the Chattanooga, Tennessee, plant starting in late October, the company said, citing weak market demand for the vehicle in the United States.
The production pause will affect approximately 160 employees, who will be furloughed but continue to receive 80% of their base pay and retain benefits, Volkswagen spokesperson Michael Lowder said in an email, according to The Chattanooga Times Free Press. Lowder described the move as “a market-driven decision” following a 65% slump in ID.4 sales during the second quarter.
Volkswagen sold fewer than 2,000 ID.4 units in the U.S. from April to June, down from nearly 5,700 in the same period of 2024. Despite offering steep incentives—including leases starting at $129 per month, making it the most affordable EV lease on the market—the company has struggled to sustain sales after the ID.4 lost eligibility for the $7,500 federal EV tax credit earlier this year.
The ID.4 was previously the third best-selling electric vehicle in the U.S. in January, but sales have declined in the months since. Volkswagen had already cut production earlier this year and has not specified the expected duration of the current halt or when furloughed employees may return.
Overall U.S. sales for Volkswagen fell 29% in the second quarter, with 1,992 ID.4s and 564 ID.Buzz models delivered. The Golf R was the only Volkswagen model to see an increase in sales compared to the same period last year.