Volkswagen announced that it plans to establish a research hub at its Transparent Factory in Dresden, Germany. The company noted that this realignment will phase out vehicle production at the site by the end of the year — marking the automaker’s first plant closure in Germany, according to the New York Times.
Transparent Factory Dresden, famous for its glass walls, opened in 2001 and began producing Volkswagen’s ID.3 electric vehicles in 2021. The company plans to dismantle the ID.3 production line in January, with the first joint research projects with the Technical University of Dresden beginning in mid-2026 and regular operations scheduled for 2027.
Most Read on IEN:
The campus will focus on several technologies, including artificial intelligence, robotics, microelectronics and chip design. Volkswagen anticipates the university to eventually occupy nearly half of the factory’s floor space.
The company added that it will reduce its technical production capacity across Germany by over 730,000 vehicles annually by 2028 and cut 35,000 jobs at German locations by 2030.
The Dresden plant currently employs 230 workers. Volkswagen expects some to retire and will offer the remaining employees transfers to other German plants, partial retirement packages and severance agreements.
Volkswagen Brand CEO Thomas Schäfer described the decision to end vehicle production at the Transparent Factory as “absolutely necessary” from an economic perspective. In July, the company reported a 33% decline in operating income for the first half of 2025, citing “high costs from increased U.S. import tariffs” totaling approximately $1.5 billion.
The automaker also recently dipped into its chip reserve stockpiles amid a power struggle over semiconductor supplier Nexperia, a Netherlands-based company owned by China’s Wingtech Technology.
Click here to subscribe to our daily newsletter featuring breaking manufacturing industry news.