Volkswagen Delays Key EV Project as Tesla Challenge Stumbles

Volkswagen AG’s ambitious push to supplant Tesla Inc. as the global electric-vehicle leader is running into trouble.

Chief Executive Officer Oliver Blume plans to push back the key Trinity battery car project from 2026 toward the end of the decade because new software won’t be ready in time, according to a person familiar with the matter. The company may also scrap plans for a €2 billion ($2.1 billion) EV factory in Germany, the person said, asking not to be named because the discussions are private.

The delays complicate Volkswagen’s bid to catch up with Tesla and lay bare the challenges of overhauling Europe’s biggest automaker, from retooling factories to fixing buggy software that has frustrated drivers of its electric cars.

Volkswagen “currently is taking the opportunity to look at all projects and investments and check them for viability,” the company said in an internal message to employees. A spokesperson declined to comment further.

Construction for the new plant near VW’s sprawling Wolfsburg facility was due to start next year, with first Trinity models rolling off the production line from 2026. The decision to add a brand-new site was part of former CEO Herbert Diess’s push to make EVs faster and become more efficient.

The executive, whom Blume replaced in September, last year unveiled aggressive strategies for EVs, software and new-mobility offerings. Blume has to walk back some of those targets because they’re unrealistic, the person said, adding that the details of the changes are still being worked out.

Manager Magazin reported on the delays earlier Thursday.