Volkswagen drops all-electric ID.4 in the US in pivot back to gas SUVs

Volkswagen will no longer produce the all-electric ID.4 at its U.S. factory in Chattanooga, Tennessee, as the German automaker shifts its resources into high-volume vehicles like its upcoming gas-powered Atlas SUV.

The company said Thursday that U.S. customers will be able to buy the ID.4 until the current inventory runs out. VW said it expects U.S. inventory to last into 2027.

Volkswagen, along with other legacy automakers, has pulled back on once-ambitious plans to shift their portfolios from gas-powered vehicles to battery electric cars, trucks, and SUVs. While some EVs have been hits, demand hasn’t met the lofty expectations that automakers forecasted. The removal of the $7,500 federal tax credit last year further dampened demand, especially for higher-priced models.

EVs do continue to sell, but price-conscious consumers are either turning to used EVs or lower-priced ones. VW began producing the mid-priced ID.4 in 2020, listing at about $45,000. The vehicle received a warm reception, but then struggled, notably with its software. But a refresh in 2023 gave it new life, and a boost in sales.

Still, overall, the sales results have been a mixed bag. VW ID.4 sales in 2023 surpassed 37,000 and then dropped 55% the following year. Sales recovered in 2025, ticking up 31% to 22,373, but failed to reach the level they hit two years prior.

On a global scale, VW said earlier this year that EV demand is holding up; Volkswagen reported in January it delivered about 382,000 all-electric vehicles worldwide in 2025, down 0.2%. It seems that wasn’t quite enough to keep the ID.4, however.

Volkswagen said it does plan to bring future models to the U.S. factory. The launch of the all‑new, second‑generation Atlas for model year 2027, is central to this effort, according to VW. Production of the Atlas is expected to begin this summer and will be available in dealerships this fall.

A company spokesperson told TechCrunch that there are a sufficient number of roles in Atlas areas for ID.4-specific production employees to transfer to. The company is also offering an early retirement buyout to some workers.

The company appears committed to the U.S. market, just not one that includes an EV right now. VW said it is exploring new products for the U.S. plant that would be designed specifically to meet U.S. consumer needs and “in line with the new focus on high-volume vehicles. Cutting through the corporate-speak, one could surmise this will be a more affordable compact SUV.

Volkswagen Group of America President and CEO Kjell Gruner said the Chattanooga plant has been, and will continue to be, a cornerstone of Volkswagen’s strategy in the United States.

VW claims it will also bring a future version of the ID.4 to the North American market, but didn’t provide a timeline or other details. If VW does bring back an electric vehicle for U.S. consumers, it will likely need to be affordable.