Zero Impact Factory VW Palmela: Cleaning Up for E-Mobility

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From 2027, VW will be building the ID Every1, presumably as the VW ID Up, in Palmela, Portugal. Volkswagen is also giving the 30-year-old plant south of Lisbon an ecological makeover.

In 1991, the automotive world was amazed at so much community spirit in the rather solitary car industry: Volkswagen and Ford set up a car factory in faraway Portugal as a joint venture to produce a colorful mix of VW Sharan, Seat Alhambra and Ford Galaxy brands half an hour's drive south of Lisbon. Ford left the company in 1999.

Palmela became Wolfsburg's small but mighty satellite. The VW Eos rolled off the production line there, as did the VW Scirocco and the successor model to the VW Sharan and Seat Alhambra. Since 2022, the VW T-Roc has exclusively filled the factory, which operates in three shifts, seven days a week. 236,000 units of the small crossover SUV were produced in 2024.

VW ID Every1: The Price is Hot

The Portuguese VW plant, which currently employs 4,850 people, has been somewhat out of the spotlight over the years. But now it's time to turn on the headlights! The entry-level electric model ID Every1 is set to become a cornerstone of Volkswagen's electric strategy, presumably as the VW ID Up. VW wants to prove that not only the Chinese can build affordable electric cars. Palmela will have to show that this is possible.

"A €20,000 Volkswagen from Europe for Europe" (~$24,000) is how Volkswagen advertises the all-electric small car. The drawback: Volkswagen still needs a lot of time to get it on the road. Until 2027, which is still a long way off in these times of "China Speed". Well, Wolfsburg is responsible for that.

Environmental Requirements Exceeded

The team in Palmela is proud to have won the contract for the new model that is so important for Volkswagen. Details of future production are still being kept strictly confidential. Tobias Bahr, Chief Environmental Officer of the Volkswagen Group, has high praise for the plant: the Portuguese have exceeded the Wolfsburg specifications with regard to "environmentally friendly production". Palmela, says Bahr, is a "lighthouse plant of the Group-wide Zero Impact Factory initiative, under which decarbonization and sustainability measures are being driven forward at all 112 of the Group's production sites."

The achievements in figures: Since 2010, the plant's energy requirements have fallen by almost 45 percent, CO₂ emissions and waste have each been reduced by 80 percent, water consumption by 63 percent and VOC emissions by 57 percent. Measured according to VW's internal "Environmental Impact Factors", the plant has achieved a 65 percent reduction in the environmental impact of production per vehicle since 2010. The target from Wolfsburg was 45 percent by 2025.

The target is 75 percent by 2030. The impact factors include primary energy emissions, air pollutants, waste and wastewater, as well as the local water risk.

$355 Million for Decarbonization and Sustainability

The new painting line will play a key role on the road to the "Zero Impact Factory". It is scheduled to start up in 2027 together with the ID Every1. A new hall is currently being built for it. Dürr is supplying the system, a state-of-the-art project: Integrated Paint Process (IPP), use of low-VOC paints, dry separation of overspray, electrified drying ovens. Energy: exclusively renewable. In 2029, the existing cathodic dip coating plant will also be modernized and electrified .

Two geothermal fields covering a total of 47,000 square meters are also currently under construction on the factory premises. Boreholes up to 120 meters deep are being drilled at 366 locations. From next year, the extracted water, which has a stable temperature of 19 degrees, will be used to heat and cool the plants and buildings. A pipe network with a total length of 81 kilometers will be created for this purpose. "This will reduce the plant's energy consumption by 25 percent. We will also reduce the operating costs for air conditioning in the plant," explains plant manager Thomas Hegel Gunther.

Margarida Pereira, Head of Product Management and Planning at Volkswagen Autoeuropa, has defined goals for production in Palmela that go far beyond environmental and climate protection and CO₂ reduction: "Increasing efficiency and designing future-oriented production." The new paint shop is an important step in this direction, as the existing paint shop, which is over 30 years old, is the plant's largest energy consumer, accounting for 63% of total energy consumption and therefore also a cost-intensive one. "With the commissioning of the new paint shop, we will reduce energy consumption per vehicle by 30 percent and CO₂ emissions by up to 50 percent," says Pereira.

Consistently Working Towards Greater Sustainability

Various modernization measures that have been implemented in the existing paint shop in recent years also show that sustainability and efficiency, and therefore also cost optimization, go hand in hand. These included heat recovery from the dryer exhaust air, new heat recovery and ventilation systems and making the operating temperature of the systems more flexible: instead of keeping it at a constant 23 degrees, it is now regulated to between 21 and 25 degrees depending on the outside temperature. The latter measure alone reduced energy consumption by almost 1,600 MWh per year.

In terms of logistics, Pereira and her team brought the suppliers on board. From 2017 to 2025, over 700 individual projects were implemented to optimize the packaging and transport of components and parts, including from the adjacent supplier park. Most of them were based on suggestions for improvement from employees. The focal points: Avoidance of packaging material and higher packing density in the transport containers. The result: 454 tons of cardboard and 70 tons of plastic were saved within five years. Calculated per vehicle: a reduction of 30 percent. Cost savings: seven million euros.

"Key Role" also for Soft Skills

Plant Manager Thomas Hegel Gunther sees the plant as playing a "key role within the Volkswagen Group". Many an example of best practice makes its way from Palmela into the Group network. This applies not only to technology applications or process optimization, but also to soft skills. For example, the plant promotes environmental awareness among its employees and their families as part of the "Rebirth" program and in cooperation with local NGOs.

The initiative has been very popular, with 850 participants so far. For example, trees are planted together and waste is collected on the beach. Employee children learn to explore and experience nature at vacation camps. The "Rebirth" initiative was communicated within the Group and offers great potential for implementation across all locations.