Volkswagen will stop producing the ID.4 electric SUV at its Chattanooga, Tennessee factory after mid-April, retooling the line for the gasoline-powered Atlas SUV. The move follows a sharp drop in ID.4 sales after the US ended clean vehicle tax credits. The company maintains sufficient ID.4 inventory through 2027.
Volkswagen's Chattanooga plant began building ID.4 electric vehicles in 2021 as part of a 2016 Dieselgate settlement requiring local EV production. The ID.4 debuted to positive reception that year and saw sales rise 31 percent in 2025 compared to the prior year. However, sales plunged 62 percent year-over-year in the final quarter of 2025 after the Trump administration eliminated the clean vehicle tax credit at the end of the third quarter. VW Group of America president and CEO Kjell Gruner described the change as a strategic shift. “The Chattanooga plant has been, and will continue to be, a cornerstone of Volkswagen’s strategy in the United States,” Gruner said. “This strategic shift underscores the company’s commitment to Chattanooga and its workforce as we position the plant for long-term success and future product opportunities.” The Atlas, Volkswagen's second-best seller in the US, will use the reconfigured line, with the second-generation model reaching dealerships this fall. Volkswagen stated it has enough ID.4 inventory to meet demand into 2027, noting that refreshed models offer more power and efficiency. The company plans a future ID.4 for North America, with details forthcoming, and recently halted ID.Buzz minivan imports for 2026 due to low sales.
