For months, Volkswagen has been threatening to close factories in Germany as it hunts for ways to slash costs and sure up its finances. However, the company’s supervisory board is now pondering the possibility of keeping them open in news that’ll no doubt be welcomed by employees and local labor unions.

If VW closed plants in Germany, it would mark the first time in the company’s history that such drastic measures have been taken. The company is facing increased competition from new brands entering the European market, in particular Chinese automakers, and according to VW brand boss Thomas Schäfer, the situation “cannot be resolved through simply cost-cutting measures.” For the past three months, unions and VW have been at loggerheads about what measures are necessary to slash costs.

Read: VW Workers Strike At 9 Plants Over Proposed 10% Pay Cuts And Closures

According to German publication Manager Magazin, VW board members had been looking to end production at the firm’s Dresden plant, which currently employs 300 people. They have also investigated selling the Osnabrueck factory, which has a 2,300-strong workforce. However, unnamed sources now claim the board favors not closing these plants and has not yet lined up a potential buyer for the Osnabrueck site.

The future of the plants is not guaranteed at this stage as there’s still said to be disagreement among some board members. Reuters understands that the Piech and Porsche families favor more aggressive cost-cutting measures.

The Osnabrueck factory currently handles production of the Porsche Cayman, Boxster, and T-Roc Cabrio. While it has an annual capacity of up to 100,000 units, just 28,000 vehicles were manufactured there last year. Production of the T-Roc Cabriolet is also scheduled to end next year, and Porsche is shifting production of the Cayman and Boxster to its site in Zuffenhausen. VW’s Dresden site currently builds the ID.3.

At the start of December, almost 100,000 VW workers across Germany walked off their jobs to protest the extreme cost-cutting measures proposed. The IG Metall union has offered to forgo bonuses for 2025 and 2026 and has also proposed using money from wage increases to finance temporary reduced working hours during times of overcapacity. It says these measures could deliver €1.5 billion ($1.6 billion) in cost savings.

Volkswagen is readying a raft of improvements for the ID.3 and ID.4 that won’t just overhaul their designs, but also introduce new interiors and improvements to their underpinnings.

While the ID.3 and ID.4 were among the first truly compelling EVs from the VW Group in their respective segments, sales haven’t exactly met expectations. When the ID.3 launched in 2019, some believed it could challenge the dominance of the Tesla Model Y. Evidently, that didn’t happen, and part of the reason is likely the design language of VW’s current ID models. Fortunately, things are set to change, with design inspiration now coming from the upcoming ID.2, which was previewed by a concept last year.

A New Look, A New Direction

During a recent interview with Auto Express, Volkswagen’s development boss, Kai Grünitz, confirmed that both the ID.3 and ID.4 will benefit from the brand’s new design language. “We will bring a re-skin for the ID.4 and ID.3, with a completely new design language going back to where we originally came from, from a design perspective, and return to what Volkswagen is known for,” he said.

This means ditching the somewhat ambiguous styling of current ID models in favor of a more coherent and recognizable aesthetic. Leading the charge is VW design head Andy Mindt, whose new approach embraces a cleaner, more defined two-box silhouette that should help give the ID. models a clearer identity.

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In addition to the new looks, Grünitz hinted at more practical improvements, too. “We also have a lot of improvements in terms of battery costs and performance, we will also bring new features and driver assistance functions,” he added. “So there will be a huge improvement, both in terms of the cost for us, but also benefit for the customers.”

Translation: better range, improved performance, and a host of new tech aimed at making the ID.3 and ID.4 more attractive to buyers

Interior Overhaul: Goodbye, Cheap Plastics

If you’ve ever spent time in an ID.3 or ID.4, you’ll know the interiors can feel a bit… cold, to put it mildly. VW seems to have taken the hint. Customers will be pleased to know that VW is working to make its cabins nicer. The new interior design direction was also previewed by the ID.2all concept and added more physical buttons and switches. One of the key features of the concept was its row of physical switches for the climate control, neatly positioned below the central infotainment display.

The British magazine also mentioned that VW will make several quality improvements to the cabins of the ID.3 and ID.4. In September, Mindt revealed that the brand plans to ditch cheap plastic materials and will instead use more fabrics.

When Will the New ID.3 and ID.4 Arrive?

As for when you can expect these refreshed ID. models to hit showrooms, Volkswagen is staying tight-lipped. The cars might not land until 2026, but given the current pace of the EV market, that’s probably just the right amount of time to make these updates matter.

Volkswagen is gearing up for a sweeping redesign of its electric ID lineup, accompanied by substantial upgrades to its MEB architecture. The refreshed range is set to roll out in 2026, with Volkswagen’s R&D chief describing the overhaul as “a much bigger change than expected.”

The new design philosophy will draw inspiration from the production version of the VW ID.2all concept, expected to debut in late 2025 or early 2026. This compact yet forward-thinking model will serve as the aesthetic blueprint for VW’s electrified future.

Rooted in Heritage, Focused on the Future

Kai Grünitz, Volkswagen Brand Board Member for Technical Development, shared fresh insights on the redesign during an interview with Autocar at the Los Angeles Auto Show. According to Grünitz, the revamped design direction is “going back to where we came from”, adding that it is closer “to what Volkswagen stands for.”

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While he didn’t specify which ID models will be updated first or the precise timeline for the rollout, industry reports suggest that VW’s entire electric lineup will be reimagined. The ID.3 hatchback and ID.4/ID.5 SUVs, being among the earliest MEB-based models, are likely at the front of the queue for facelifts.

Meanwhile, the newer ID.7 sedan may follow suit, though the retro-cool ID.Buzz van might escape major exterior revisions. In typical VW fashion, the changes aim to refine rather than reinvent the lineup’s core appeal.

MEB Evolution

Beyond styling, the updates will deliver technical enhancements, including improved performance, lower battery costs, and “new functionality.” Grünitz hinted that these advancements will extend the MEB platform’s lifecycle until the next-gen SSP (Scalable Systems Platform) takes over, covering “everything from city cars to high-performance supercars”.

Volkswagen is clearly playing the long game with SSP, backed by its recent partnership with Rivian. Grünitz was quick to praise the US-based EV maker, describing it as “much leaner and faster than traditional OEMs” and comparable to the nimbleness of Chinese automakers. He also commended Rivian’s “best-in-class” OTA (over-the-air) software updates—a capability VW intends to adopt for its own electric arsenal.

ID.2 To Spawn Electric SUV and Hot Hatch

The next step for VW is to show an ID.2-based SUV concept at the 2025 Munich Motor Show. This study will be a preview for the second production EV to ride on the MEB Entry platform, following the ID.2 hatchback.

Enthusiasts have even more to look forward to: the ID.2 will evolve into the first-ever fully electric GTI. As previewed by the ID.GTI Concept in 2023, this hot hatch is set to debut in 2026, embodying the spirit of the Golf GTI. Grünitz teased that the model will blend nostalgia with innovation, delivering surprises that should resonate with VW loyalists and newcomers alike.