Workers on their morning shifts went on strike for two hours, while those on the evening shift plan to leave work early in protest at the carmaker's demands, which include a 10% wage cut.
At Volkswagen's main plant in Wolfsburg, which employs 70,000 people, a two-hour strike means several hundred cars cannot be built, union sources said.
In addition to Wolfsburg and Hanover, which employs a further 14,000 staff, plants affected include Zwickau, VW's EV-only plant, where workers will strike today and tomorrow.
It is the first time the company has threatened to close factories in Germany in its 87-year history as European manufacturers battle foreign competition, high production costs and slow uptake of electric vehicles on the continent.
The industry has argued consumer appetite for electric vehicles is still too low.
Stellantis – which owns Vauxhall – earlier this week blamed the mandate as it announced plans to close its van factory in Luton, putting 1,100 jobs at risk. Chief Executive Carlos Tavares resigned abruptly on Sunday after the group lost around 40% of its value this year.
The boss of Ford's UK arm warned late last month that Britain's car industry is in crisis due to the overwhelming lack of demand for electric cars.
Lisa Brankin, the chairman and managing director of Ford UK, called for the Government to urgently introduce ‘incentives’ in a bid to stoke interest.
The crisis at Europe's largest carmaker has hit Germany at a time of economic uncertainty and domestic political upheaval, as well as wider turmoil among the region's automakers.
Several thousand workers of Europe's largest carmaker Volkswagen AG gather during pay-rise protests on the grounds of VW's largest plant in Wolfsburg, Germany, December 2
Employees of German car maker Volkswagen leave the exit gate before they demonstrate outside the commercial cars plant of VW in Hanover, northern Germany, on December 2
Employees of German car maker Volkswagen leave the exit gate before they demonstrate outside the commercial cars plant of VW in Hanover, northern Germany, on December 2
It is the first time the company has threatened to close factories in Germany in its 87-year history (Zwickau demonstration pictured on Monday)
It is the first time the company has threatened to close factories in Germany in its 87-year history (Zwickau demonstration pictured on Monday)
The VW strikes, which could escalate into 24-hour or unlimited stoppages unless a deal is struck in the next round of wage negotiations, will reduce Volkswagen's output, adding to the impact of declining deliveries and plunging profit.
'How long and how intensive this confrontation needs to be is Volkswagen's responsibility at the negotiating table,' Thorsten Groeger, who leads negotiations on behalf of the IG Metall union, said.
'Anyone who ignores the workforce is playing with fire - and we know how to turn sparks into flames,' he added.
Daniela Cavallo, head of Volkswagen's works council, reiterated that Volkswagen's biggest shareholders, which apart from Lower Saxony include a holding firm controlled by the Porsche and Piech families, may also have to make sacrifices with regard to the annual dividend.She did not elaborate what that would entail.
Cavallo said the fourth round of negotiations scheduled for December 9 would either result in both sides finding common ground or an escalation.
'Unfortunately, the signals recently sent by management are not really encouraging,' she said, adding plant closures, mass layoffs and cuts to existing wages were red lines for workers.
A Volkswagen spokesperson said the carmaker respected the workers' right to strike and had taken steps to ensure a basic level of supplies to customers and minimise the strike's impact.
The union last week proposed measures it said would save 1.5 billion euros ($1.6 billion), including forgoing bonuses for 2025 and 2026, which management dismissed as unrealistic and delaying the inevitable.
The strikes come amid slumping sales of electric vehicles on the continent. The first three months of the year saw a sales slump of 24 per cent in Europe as sales worldwide dropped three per cent to 136,400.
This comes in spite of efforts to revamp infrastructure and encourage consumers to buy electric alternatives, with deadlines put in place to stop the sale of petrol and diesel cars.
Rishi Sunak pushed back a deadline to block sales of new petrol and diesel cars in the UK while he was prime minister, last September.
The government had originally hoped to meet a target of preventing sales of new cars with combustion engines by 2030, but rolled this back to 2035.
Volkswagen sells some of the most popular EVs in the UK, including the Volkswagen ID.
Labour pledged to restore the 2030 phase-out target in its manifesto, but now looks set to water down targets by allowing the sale of hybrid models until 2035 amid growing pressure from car makers.
Former transport secretary Louise Haigh, who resigned yesterday, was reportedly open to allowing the sale of fully hybrid, Toyota Prius-style vehicles – which drives on both a normal engine as well as a battery – until 2035.
It is believed her departure will not change that view, meaning Labour will effectively adopt views first introduced by Boris Johnson in 2020.
Manufacturers have been lobbying for a change to the zero-emission vehicle (ZEV) mandate, which forces brands to sell an increasing proportion of electric cars each year.
Ms Brankin said Ford has invested ‘significantly’ in the production and development of EVs, with ‘well over’ £350million invested around electrification in the UK, adding: ‘So we kind of need to make it work.’
Asked whether she is happy for the Government to stick to the targets around EVs and ending production of diesel and petrol cars as long as they help persuade customers to buy electric vehicles, Ms Brankin told BBC Radio 4’s Today: ‘Yes, I think so.’
She said that 'as an industry' they supported the government's push for the uptake of EVs, but warned 'it's just that there isn't customer demand'.
Huge crowds turn out in protest in Wolfsburg, Germany on December 2
In a speech to Volkswagen workers assembled on a square in Hanover on Monday, union representative Sascha Dudzik condemned management for making workers pay for what he said were executives' mistakes, from the diesel emissions scandal to falling behind more innovative competitors in China.
'We did not make these decisions - the millionaires at the top of VW did,' he said.
Workers marched in Hanover, blowing whistles, holding flags and signs and accompanied by a four-piece band.
'We are told we are more expensive than workers in Bratislava (Slovakia), (and) in China. I'd like to know how managements' salaries compare,' said Stavros Christidis, works council chief at the Hanover plant.
Lucia Heim, a worker at VW's Hanover plant taking part in Monday's strike, also criticised what she saw as management injustice.
'It's a twisted world: in football, trainers quit if they're not winning the game. At VW, it's the other way around. Players are being punished,' she said.
Volkswagen is not alone. Despite growing steam long-term, Elon Musk's Tesla saw quarterly EV sales fall from a peak of 484,500 in Q4 2023 to just 386,800 in the first quarter of 2024.
Meanwhile, Chinese car manufacturer BYD – the world's largest seller of electric vehicles – saw global EV sales crash earlier this year.
In the first quarter of this year, it sold just over 300,000 EVs – dramatically down from 526,000 in the final quarter of last year.
Electric vehicles often cost more upfront, and sales appear to have slumped in the US and Europe in part due to reduced incentives.
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