Beginning next month, 160 workers at the Chattanooga Volkswagen plant will be placed on furlough as the company scales back production of its fully-electric SUV model.
The ID.4, Volkswagen’s first fully-electric SUV, is one of three models manufactured at the company’s Chattanooga plant. The facility also manufactures the Volkswagen Atlas and Volkswagen Atlas Cross Sport.
Employees at the Chattanooga plant were notified Tuesday morning about the company’s plans to scale back production of the ID.4, according to the Chattanooga Times Free Press, which noted how sales of the ID.4 fell 65 percent from April through June compared to the same period last year as the German automaker sold fewer than 2,000 units during the quarter.
“We are adjusting our ID.4 production in Chattanooga, which will result in a temporary furlough for a small number of employees beginning in late October,” Michael Lowder, a spokesman for Volkswagen, said in a statement.
Lowder said affected employees will continue to receive 80 percent of their base compensation and be covered by all current benefits while on furlough.
“This adjustment in no way changes our commitment to the ID.4, our growing EV portfolio, or our commitment to our Chattanooga team. This is a market-driven decision, based on aligning our production volume to market demand,” Lowder added.
In September 2024, a recall of the ID.4 led to furloughs of around 200 employees at Volkswagen’s Chattanooga plant. Production resumed earlier this year.
While U.S. EV sales hit an all-time monthly record last month as customers rushed to take advantage of the soon-expiring federal EV tax credits, overall U.S. EV sales fell 6.3 percent during 2025’s second quarter, according to a report by Cox Automotive.
Volkswagen’s latest round of furloughs comes as the company continues to be in contract negotiations with the United Auto Workers after employees voted to unionize last year.
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Kaitlin Housler is a reporter at The Tennessee Star and The Star News Network. Follow Kaitlin on X / Twitter.
Image “Volkswagens: Made in Chattanooga” by VolkswagenUSA.
