Volkswagen to Cut Up to 100,000 Jobs as Tesla and Chinese EVs Close In

Volkswagen is reportedly planning to cut up to 100,000 jobs — about 15% of its workforce — and potentially close four factories in the most radical restructuring of its 89-year history. The reported plan, phased over several years and not yet confirmed by VW, is driven by intense pressure from Tesla on premium EVs and Chinese brands like BYD on price, and stands in sharp contrast to Tesla's expanding European production.

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Volkswagen is reportedly preparing the deepest restructuring in its 89-year history, with plans that could see the company shed up to 100,000 jobs and close as many as four factories. For Tesla, it is the clearest sign yet of how hard Europe's incumbent giant is being squeezed in the shift to electric cars.

What is reportedly on the table

Multiple outlets reported in late June 2026 that Volkswagen is weighing cuts of around 100,000 positions — roughly 15% of its global workforce — alongside the potential closure of four plants. The reductions are said to be phased over the coming years rather than imposed at once, and Volkswagen has not formally confirmed the figures. If carried out at that scale, it would be the most radical overhaul the company has ever attempted.

The driver, according to the reports, is cost. Volkswagen's expensive domestic production base has become a liability as cheaper, feature-rich electric cars flood the market. Chinese brands led by BYD are undercutting VW on price while scaling manufacturing at speed, and the German group has struggled to match them on either cost or software.

The Tesla and China squeeze

The restructuring underlines a competitive reordering of the European market. Where Volkswagen long dominated at home, it now faces Tesla above it on EV credibility and a wave of Chinese manufacturers below it on price.

Pressure	Source	Effect on VW
Premium EV demand	Tesla	Lost share in higher-margin segments
Low-cost EVs	BYD and other Chinese brands	Undercut on price in volume segments
Software and updates	Tesla, Chinese rivals	Slower feature cadence

The contrast with Tesla is stark. While Volkswagen weighs plant closures, Tesla is expanding its European footprint — planning a new building and rail hub at Giga Berlin and two output increases through 2026, as TeslAnt reported in the Giga Berlin expansion plans. One company is adding capacity in Germany as the other considers removing it.

Why it matters for EV buyers

A Volkswagen retrenchment has consequences well beyond its own workforce. VW remains one of the largest EV producers in Europe, and a smaller, more cautious group could mean fewer affordable European-built electric models at a time when buyers want more choice, not less. It also hands Tesla and Chinese rivals room to grow.

For now these remain reports of a plan under discussion, not a finalised programme, and the numbers may change before anything is confirmed. But the direction of travel is unmistakable: the company that defined European motoring for generations is being forced into a defensive crouch by the electric transition it was slow to embrace.