Volkswagen is axing production of the all-electric ID.4 at its Tennessee factory, redirecting resources towards traditional gas-powered vehicles like the Atlas SUV.

The company expects current inventory to last until 2027, but this move marks a retreat from earlier ambitious EV plans as demand for electric cars hasn't met expectations.

While some EVs have been successful, price-conscious consumers are opting for cheaper models or used versions. The ID.4, despite initial popularity and a software refresh, failed to sustain its sales momentum over the past few years.

Volkswagen remains committed to the U.S. market, focusing on high-volume vehicles to boost profitability. It's exploring new products that could include a more affordable compact SUV designed for American tastes.