Volkswagen halts ID.4 electric SUV in the US, shifts focus back to gas models

Volkswagen will cease production of its all-electric ID.4 at its Chattanooga, Tennessee, manufacturing facility as the automaker redirects its focus to higher-volume vehicles, including the upcoming gasoline-powered Atlas SUV.

The company stated on Thursday that customers in the United States can continue to purchase the ID.4 until existing inventory is depleted. Volkswagen expects the current supply to last through 2027.

Volkswagen, along with several other traditional automakers, has scaled back earlier aggressive plans to transition fully from internal combustion engine vehicles to battery-electric cars, trucks, and SUVs. Although certain EV models have performed well, overall demand has not aligned with the high expectations initially projected by manufacturers. The elimination of the $7,500 federal tax credit last year further weakened demand, particularly for higher-priced electric models.

Electric vehicles are still being sold, but many cost-conscious buyers are now leaning toward used EVs or more affordable options. Volkswagen first introduced the mid-range ID.4 in 2020 with a starting price of around $45,000. The vehicle was initially well-received but later faced challenges, particularly with software performance. A 2023 refresh improved the model and helped increase sales momentum.

However, sales performance has remained inconsistent. ID.4 sales in 2023 exceeded 37,000 units, then fell 55% the next year. In 2025, sales rebounded by 31% to reach 22,373 units, though this figure still fell short of the earlier peak.

Globally, Volkswagen indicated earlier this year that demand for EVs remains relatively stable. The company reported delivering approximately 382,000 all-electric vehicles worldwide in 2025, reflecting a slight 0.2% decline. Despite this, the numbers were not strong enough to sustain continued production of the ID.4 in the U.S.

Volkswagen confirmed that it intends to introduce future models at the Chattanooga plant. A key part of this plan is the launch of the second-generation Atlas SUV for the 2027 model year. Production of the new Atlas is scheduled to begin this summer, with availability in dealerships expected in the fall.

A company spokesperson said there are enough job opportunities in Atlas-related production areas for employees previously assigned to ID.4 manufacturing to transition. Additionally, Volkswagen is offering early retirement buyout packages to certain workers.

The automaker remains committed to the U.S. market, though its immediate strategy does not centre on electric vehicles. Volkswagen stated that it is evaluating new products for the Chattanooga facility tailored to U.S. consumer preferences and aligned with its renewed emphasis on high-volume models. This direction suggests a potential focus on more affordable compact SUVs.

Volkswagen Group of America President and CEO Kjell Gruner said the Chattanooga plant continues to play a critical role in the company’s long-term strategy in the United States.

While Volkswagen has indicated plans to bring a future version of the ID.4 back to North America, it has not shared a timeline or additional specifics. Any return of an electric model to the U.S. market will likely depend on achieving a more competitive and accessible price point for consumers.