Volkswagen may cancel its plan to move Golf production to Mexico, Autocar has learned.

The news comes as the company reviews key elements of its global production strategy announced last year.

This is down to delays in the development its Scalable Systems Platform (SSP) for EVs, growing financial pressure and employee unrest.  

A decision to transfer production of the ICE Golf from its traditional home in Wolfsburg, Germany, to Puebla, Mexico, in 2027 was announced in December last year as part of a job security deal made with Volkswagen’s works council.

Simultaneously, Volkswagen confirmed its Wolfsburg manufacturing headquarters was to gain two EVs – the upcoming facelifted Volkswagen ID 3 and its Cupra Born sister - from the Zwickau factory, ensuring production capacity at the historic plant remained utilised.

However, Volkswagen’s supervisory board has now postponed its multi-year investment package, with internal forecasts suggesting it is facing an €11 billion (£9.7 billion) funding gap for 2026 alone.

According to Volkswagen sources, this has thrown numerous new model development projects and previous production planning into doubt, including the Golf’s move to Mexico.

"The investment is the heart of our long-term strategy," a source familiar with the matter told Autocar. "When it is postponed, projects are called into question, including those that have already been decided upon."

Central to the uncertainty is the delayed SSP architecture. It was initially planned to ready in 2026, but ongoing software development issues have now pushed its introduction back to 2029 or even later.

The SSP is critical to Volkswagen's EV future, boasting an 800V electrical architecture for faster charging compared with the current MEB EV platform's 400V system.

Wolfsburg was not only scheduled to build the MEB-based ID 3 and Born but was also slated for a later retooling to produce SSP-based EVs, including electric successors to the Golf and Tiguan (Volkswagen's two best-selling ICE cars) from the end of the decade.

What are the issues that come with such a rethink?

The delay of the SSP platform creates a complex problem.

Moving Golf production to Mexico and the ID 3 and Born to Wolfsburg was a short-to-medium-term strategy; with the long-term electric future now pushed back, the entire logic of these production shifts is under review.

The Wolfsburg plant could face uncertainty and potential mass layoffs if the Golf departs and sales of its electric successors fail to ignite, resulting in the projected production volume of those models being subsequently scaled back.

The original plan of moving ID 3 and Born production to Wolfsburg from Zwickau would also have meant scalling back the latter plant's production lines to one, putting further jobs at risk.

Volkswagen faces mounting financial pressure from several fronts, including the dual investment in both future ICE and electric models.

As well as funding development of the SSP platform, it's considering a further update of its MQB ICE car platform.

“We’re still going to need internal-combustion-engine models and a suitable platform beyond 2035,” an engineer with knowledge of Volkswagen’s future model planning revealed.  

A company spokesperson declined to officially comment on the specifics of the postponed investment plan.