Volkswagen has struck another blow to the US electric car market.
The company announced Thursday that its assembly plant in Chattanooga, Tennessee, will stop production of the company’s all-electric SUV ID.4 starting in mid-April. Instead, the focus will be on the production of the new generation of Atlas models, the best-selling petrol-powered SUV. The second-generation Atlas will go into production in the summer and will be available at dealerships in the fall.
Volkswagen will continue to sell whatever is left in its ID.4 inventory until it runs out of inventory in 2027.
“The electric vehicle market continues to challenge the industry, requiring measured decisions over the past few years to overcome this unpredictability,” Volkswagen said. press release announces his decision.
This is particularly bad news for environmentalists: the Atlas models are way off worse Compared to ID.4 fuel economy efficiency standards, It consumes about 5 times more energy than Atlas The EV model replaces it.
Although production of the ID.4 has effectively ended in the US, production continues in China and the EU. The company also said it is currently planning a “future version of the ID.4” specifically for the North American market, but did not specify what that would look like.
Volkswagen’s decision is only the latest in a rough descent the trend It started when President Trump cut off for the EV industry $7,500 electric vehicle tax credit last year. But while the American EV industry is shrinking, sales in China and Europe continue to grow. China has surpassed almost every other industry quality and the affordability of its EVs and Chinese exports currently dominate most EV markets around the world, except for the US where Chinese EV imports face 100% tariffs.
Trump and some American automakers could be essentially fine compromises A global EV race to China, but some experts warn that it may be ill-advised, especially in light of recent events.
In response to US and Israeli military strikes against Iran since February 28, the Iranian regime has closed most of the traffic through the Strait of Hormuz, a critical point for oil trade. In response, oil prices around the world including in the United Stateshas increased rapidly, highlighting the volatility of gas in an unpredictable geopolitical environment.
Morgan Stanley analysts think so with current gas prices 60% cheaper powering an EV more than a gas-powered car.
Car sales in the US are down sharply A trend that auto industry insiders largely attributed to rising gas prices in March.
China was able to weather most of the storm thanks to its EV industry. Chinese car exports accelerated Despite the war in the Middle East in March, the China Passenger Car Association said on Thursday that shipments were up. Earlier this week, Wang Chuanfu, CEO of Chinese EV giant BYD reported said the company expects overseas EV sales to rise to “another level” this year thanks to high gas prices.
Rising gas prices have also increased interest in electric vehicles in the United States. According to the car buying platform CarEdgeOnline searches for EV models increased by 20% in the first three weeks of the war alone.
It was an American car manufacturer that could come in handy Tesla. The company said last week that it sold more electric cars in the first three months of 2026 than in the same period in 2025, despite losing the tax credit. The company too reported smaller, cheaper (and actually new) EV proposes to solve the affordability problem plaguing the American market in the absence of government subsidies and help the company become more competitive in China, where low prices prevail.
