Volkswagen’s $2.1 billion plan to launch a dedicated electric-vehicle factory in Wolfsburg, Germany is kaput. 

The automaker instead reportedly plans to modify its existing plants in Zwickau and Wolfsburg to handle production of a new flagship EV — the postponed Project Trinity — and an all-electric Golf hatchback. 

This tracks with an earlier statement from VW passenger cars boss Thomas Schaefer, who said last year that an additional factory might not be necessary as VW produces fewer combustion-engine vehicles over time. Still, this isn’t just about making space for EVs; the automaker is in cost-cutting mode.

Really, that’s putting it lightly. In July, Schaefer said VW’s “roof is on fire” in a meeting with senior leaders, citing the company’s need to overhaul its “complex, slow, and inflexible” processes. A big factor here was VW’s delayed embrace of EVs, which led it to lose serious ground to BYD in China.

VW still hasn’t really proved itself in electrics — in fact, just a couple days ago Reuters reported that the automaker would temporarily pause production of two EVs — the ID.3 and Cupra Born — due to decreased demand.

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