Volkswagen is ceasing production of the ID.4 electric vehicle in the US from mid-April, with the Chattanooga factory reconfiguring for its new gasoline-powered Atlas SUV.

The decision comes despite the ID.4’s initial success and strong sales in 2025, which saw a 31% increase over the previous year. However, post-2025, the scrapping of the clean vehicle tax credit dramatically reduced demand for electric vehicles like the ID.4.

Volkswagen believes that Americans will opt for conventional SUVs instead, perhaps because they can now expect to pay more at the pump due to global conflicts in the Middle East driving up petrol prices.

This move could signal a wider shift towards traditional vehicles in the US market, but VW is confident it can capitalize on this trend with its Atlas model set to be released by autumn 2026.