Volkswagen brand CEO Thomas Schäfer has said the brand’s ID.3and ID.4 electric vehicles (EVs) will be replaced by “true Volkswagens” in a dramatic shake-up, following admitted errors in design and usability.
Speaking to Auto Express at a preview of the new ID.3 Neo – an updated version of the ID.3, which will be followed by a revised ID.4 – Mr Schäfer said the new model marks the start of a brand rebuild after Volkswagen’s EV push saw it steer off course.
“It was clear to me that we were actually losing our core: what Volkswagen really stands for, the special Volkswagen feeling, for customers, for fans and for our teams,” he told Auto Express.
Counting the number of days since he started as CEO in 2022, coming from Skoda, Mr Schäfer said the vision had been reset.
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“I’m very happy to stand in front of you today after 1360 days with a strong team and one clear goal: to build real Volkswagen models again, cars that carry the spirit of the brand.”
The comments follow significant losses after the automaker’s heavy investment in EVs, with models criticised for unfamiliar branding, bland exterior design and troublesome user interfaces – including a lack of physical buttons.
The ID.4, for example, has been widely criticised for its smartphone-like slider controls, prompting a lawsuit against the automaker from frustrated owners in the US.
Despite the Volkswagen brand overtaking Tesla in EV sales in Europe last year, declining global sales saw the Volkswagen Group announce an additional 15,000 layoffs last month as part of 50,000 job losses planned by 2030, following a 53 per cent drop in profits.
As part of this restructuring, the Volkswagen Group closed its Brussels, Belgium plant, while brands under its umbrella including Audi and Porsche also reported declines in sales and profits.
It also closed its Dresden factory in December, marking the first German plant closure in the company’s history, and this week announced it will stop production of EVs in its Tennessee plant in the US, with an expected US$800 million (A$1.12 billion) cost to retool to build other models instead.
In describing the ID.3 – not sold in Australia – and the ID.4 as “not true Volkswagens” in terms of design, Mr Schäfer admitted the brand had lost direction internally, which affected its products.
“We had to change ourselves, we had to create a new mindset,” Mr Schäfer said.
“We brought our management team together, all 600 of them, and I said: ‘Put all the numbers on the table, all the problems, no filters’ and we talked about where we wanted to go.
“I expected people to hold back, but people got up and applauded and said, ‘we’re finally looking in the right corners’.”
This includes recommitting to internal combustion engine (ICE) models, reversing its previous plan to sell only EVs by 2033, aided by regulatory changes in the European Union easing a 2035 mandate for 100 per cent zero-emissions vehicle sales.
Emissions laws have also been significantly wound back in the US, improving the short-term profitability of ICE models following the end of national EV tax breaks after September 30, 2025.
Volkswagen has also confirmed it will lean on its iconic model names – such as Polo and Golf – for future electric vehicles to better position them with buyers.
This includes the ID. Cross compact electric SUV and the ID. Polo, including a hot ID. Polo GTI variant unveiled this year. Petrol versions will remain on sale, with the current Golf set to be sold alongside an upcoming electric Golf for the foreseeable future.
Volkswagen Australia is in the midst of a plug-in hybrid (PHEV) push amid rising demand for hybrid vehicles, with Tiguan PHEV and Tayron PHEV due in showrooms before June 2026.
The local arm has ruled out the current ID.3 for Australia, telling CarExpert last month it’s focused on mid-size EV SUV segments – where it has offered the ID.4 and ID.5 since 2025 – with the larger ID.7 also not expected locally anytime soon.