Volkswagen announced the closure of its Transparent Factory in Dresden, Germany, to focus on research. The plant, known for producing ID.3 electric vehicles, will shift to joint projects with the Technical University of Dresden. The company plans to reduce technical production capacity by over 730,000 vehicles annually by 2028 and cut 35,000 jobs at German locations by 2030.

The new research hub will specialize in AI, robotics, microelectronics, and chip design. Volkswagen anticipates the university to occupy nearly half of the factory’s floor space. The company plans to offer transfers to other German plants, partial retirement packages, and severance agreements to the 230 current employees at the Dresden plant.

Volkswagen Brand CEO Thomas Schäfer called the decision to end vehicle production at the Transparent Factory “absolutely necessary” due to economic reasons. The company reported a 33% decline in operating income for the first half of 2025, citing high costs from increased U.S. import tariffs. Volkswagen also used its chip reserve stockpiles amid a power struggle over semiconductor supplier Nexperia, owned by China’s Wingtech Technology.

Read more at Yahoo Finance: Volkswagen Announces Unprecedented Plant Closure