Volkswagen Considers Importing Chinese Models to German Plants as Stock Trades Near 52-Week Low

The idea would have been unthinkable a decade ago: Volkswagen building Chinese-developed vehicles on German soil. But Lower Saxony’s minister-president, Olaf Lies, has thrown that very concept onto the table as the automaker scrambles to fill empty halls at home.

Lies, whose state controls just over 20% of Volkswagen’s voting rights — making it the second-largest shareholder bloc — is not speaking for the company’s management. Yet his suggestion carries weight. He argues that bringing China-bound models to domestic factories could stabilise production and protect jobs, a direct response to reports of deep cuts looming at German sites.

For years, Volkswagen’s China strategy was built on localisation: build where you sell. The company plans to launch more than 20 new electric vehicles in Asia this year alone and expand its line-up to 50 models by 2030. Recent debuts at the Auto China show included the ID. UNYX, developed in partnership with Xpeng, and the ID. AURA T6, which rides on a locally engineered electronics architecture. Now those same vehicles could roll off assembly lines in Wolfsburg or Zwickau.

The urgency of that shift is underscored by weakening fundamentals. Global vehicle sales dropped to two million units in the first quarter, with Chinese deliveries slumping 20%. Operating profit fell to €2.5 billion, pushing the operating margin to a wafer-thin 3.3%. Management is sticking to its full-year forecast of between 4.0% and 5.5%, but that target looks increasingly ambitious as cost pressures mount.

Should investors sell immediately? Or is it worth buying Volkswagen?

Investors are voting with their feet. Volkswagen shares lost another 2.20% in recent trading, falling to €72.76 and brushing the 52-week low of €72.12. The year-to-date decline now exceeds 31%. The relative strength index has plunged to 21.5, even deeper than the oversold reading of 24 seen earlier, though the distance to the 200-day moving average of €94.66 confirms the bearish trend remains intact.

Analyst Philippe Houchois at Jefferies has cut his price target from €130 to €120, while reiterating a “buy” rating. He points to the painful restructuring under way and Volkswagen’s heavy reliance on Europe as headwinds. On the positive side, he highlights improved contract terms for the planned sale of the “Everllence” unit, which could strengthen the balance sheet and expand strategic options. Nevertheless, Houchois warns that further financial charges from the overhaul are likely.

The external environment offers little relief. The European Union has already imposed countervailing duties on Chinese EVs, and additional trade measures targeting overcapacity from the East could follow before autumn 2026. For Volkswagen, that headwind arrives in the middle of a sweeping cost-cutting drive. Management is reviewing the entire portfolio, aiming to slim down cost structures and secure European supply chains to fund the costly shift to electric mobility.

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Adding to the regulatory burden at home, new tax rules for EV charging now require meticulous documentation of electricity consumption, a move that analysts say will slow down fleet operators and private buyers alike.

Volkswagen is set to release preliminary half-year figures on 13 July, with the full report following on 24 July. By then, management will need to offer a credible plan for filling its German factories — possibly with cars designed 8,000 kilometres away.

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