Assembly at VW in Zwickau: In the future, the group will rely on a “second pillar” in Saxony. Photo: Hendrik Schmidt/dpa
Dusseldorf. Volkswagen now also wants to recycle vehicles at its plant in Zwickau, Saxony. The car manufacturer announced the start of the new business area on Tuesday morning.
From 2027 onwards, capacity will be gradually increased, and by 2030 up to 15,000 cars will be dismantled and remanufactured annually. The implementation is part of the collective bargaining agreement that the car manufacturer concluded with the IG Metall union at the end of 2024.
The VW factory in Zwickau was once a symbol of the dawn of electromobility: in 2020, Volkswagen became the first factory in the world to completely convert the factory to the production of fully electric vehicles. Today the group’s largest electric car factory in Europe is still located there. But production in the halls is no longer running according to the original plans – the location is operating below its capacity.
Collective bargaining agreement hit Zwickau hard
The reason: After the “Christmas truce” at the end of 2024, Zwickau lost several models and production was relocated to other plants. The circular economy should now become a new mainstay for the factory in Saxony.
Volkswagen in Zwickau plans to systematically dismantle vehicles, test components, recover raw materials and reuse components from now on. It’s not just about classic recycling: VW also wants to process parts so that they can be put back into circulation after testing – for used vehicles, for example.
VW is selling the new beginning as a strategic answer to several problems in the industry: raw materials are becoming more expensive and geopolitically riskier, CO2 regulations are stricter, margins are thinner.
Andreas Walingen, head of circular economy at VW, speaks of “raw material resilience, decarbonization, economic efficiency and employment” as the central reasons for the change of course in Saxony. VW is pursuing the goal of reusing raw materials more for the construction of new vehicles – and becoming more independent of global raw material trading.
Zwickau is also intended to become a central competence center for the topic of circular economy within the group and set standards for other VW locations. The car manufacturer also wants to develop and standardize technical innovations and the use of AI. Data platforms and AI are intended to better track and control material flows and recycling processes.
However, entry into the new business area is still being implemented cautiously. According to VW, 500 pre-series vehicles will initially be processed this year. The volume is expected to increase from 2027, and the group plans to produce the announced 15,000 vehicles annually by 2030.
Volkswagen wants to invest up to 90 million euros for the conversion, technical systems and AI applications. The Free State of Saxony is additionally supporting the project with up to 10.7 million euros. Saxony’s Economics Minister Dirk Panter said in Zwickau: “The diversification of the Zwickau location strengthens the future viability of the Saxon automotive region.”
This is also relevant for the employees because Zwickau has noticeably lost staff in recent years. There are currently just over 8,000 employees working at the plant. Just a few years ago the number was more than 11,000 – mainly temporary and temporary employees had to leave the site. In the future, the number of employees is likely to continue to fall.
The circular economy is only likely to be of limited use as a driver for new jobs. Volkswagen announces that it will secure around 200 jobs by establishing the new focus. Corporate circles say that there was talk of significantly more jobs in the original plan.
Fewer and fewer models are being built in Zwickau
Zwickau suffers from low utilization, which is also due to the fact that more and more models have been removed from the plant’s area of responsibility. The so-called “Christmas truce” stipulated that of the six electric car models to date, only the Audi Q4 e-tron would be built in Zwickau in the future.
The ID.4 moved to Emden. The VW ID.3 and its sister model Cupra Born were to be outsourced to Wolfsburg. VW recently gave the all-clear here: the Cupra Born will continue to be built in Zwickau, and production of the ID.3 should remain in Zwickau for at least a longer period of time.
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However, the location will not remain without competition, even with its new business model. The French car manufacturer Renault converted its former assembly plant in Flins near Paris into a circular economy factory in 2020, under the name “Refactory”. Used cars are repaired and prepared there, regardless of the brand. With up to 45,000 vehicles per year, Renault’s ambitions are currently greater than those of VW in Zwickau.