Volkswagen has temporarily halted development of its next-generation all-electric ID. Golf as it is pushed by a large loss and pressure to cut costs. Even a key electrification project pursued at its German headquarters plant has fallen within the scope of restructuring.

Electrek recently reported that Volkswagen decided to suspend pre-development work on the electric Golf under way at its Wolfsburg plant in Germany. Thomas Schaefer (Thomas Schäfer), chief executive of the Volkswagen brand, acknowledged the financial pressure in an internal memo, saying, "At the moment, we cannot afford this work."

The Golf is Volkswagen's flagship hatchback and an iconic model for the Wolfsburg plant. Schaefer stressed that the decision was not easy, saying, "I know well what the Golf means to the company and the region." The works council also took the suspension of development spending as a sign that the group's financial burden is serious.

The decision comes as performance deteriorates. Volkswagen Group posted an operating loss of 5.9 billion euros in the third quarter this year. It was the biggest quarterly loss since the 2015 dieselgate scandal. A decline in the value of its Porsche stake, weak sales in the China market and worsening electric-vehicle profitability coincided. Arno Antlitz (Arno Antlitz), Volkswagen's chief financial officer, called for a swift response, saying, "We have no time to waste."

The Wolfsburg plant is currently about 300 million euros short of its cost-cutting target. The restructuring plan, called Future Plan 2030, approved by Volkswagen's supervisory board in September, includes cutting 100,000 jobs worldwide, reducing the number of models and the possibility of halting production at some plants in Germany.

The ID. Golf is considered a flagship model that will apply the next-generation SSP platform. It was originally scheduled for launch in 2028, but the target timing was pushed back to 2030 as development of the platform in cooperation with Rivian was delayed. Despite the suspension, Volkswagen's works council says it will make up for the disruption and keep the original launch schedule.

Volkswagen is maintaining its plan to move production of the internal combustion engine Golf to Mexico in 2027 and produce the electric Golf in Wolfsburg. The timing for resuming development has not been confirmed.