Volkswagen's Downsizing Starts With Selling A Factory To Israeli Arms Manufacturers

Happy Tuesday! It's September 8, 2026, and this is The Morning Shift — your daily roundup of the top automotive headlines from around the world, in one place. This is where you'll find the most important stories that are shaping the way Americans drive and get around.

In this morning's edition, we're looking at Volkswagen's factory sale to Israeli weapons makers, and Tesla's latest European FSD approval. We'll also look at BYD's 2027 sales goals, and Jaguar Land Rover's personnel cuts. 

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Volkswagen's been doing its best to stop being one of the world's largest automakers — instead of scale at all costs, the company is now looking to downsize for higher profits. Those downsizing plans include cutting factories loose, and now one seems to have a buyer: Israeli weapons manufacturer Rafael Advanced Defense Systems, via a deal with private equity firm Aurelius Capital. From the Wall Street Journal:

Volkswagen said it is selling its factory in the German city of Osnabrueck to Israel's Aurelius Capital and the state of Lower Saxony, which aim to repurpose the site to make defense equipment.

...

Under the deal with Volkswagen, investment company Aurelius would take over the plant as majority owner, together with the state of Lower Saxony, and turn it into a security and defense facility, Volkswagen said Monday. Financial details weren't disclosed.

The site's new owners plan an anchor project with Israeli company Rafael Advanced Defense Systems that would involve potentially producing air-defense systems and components for Germany and Europe, Volkswagen said.

This sale could be complicated by, of all things, the United Nations. Nicaragua went to the UN over Germany's weapons sales to Israel, accusing the nation of enabling genocide. A German government — the state of Lower Saxony — co-operating a weapons plant with a nation that the UN has repeatedly determined to be orchestrating a genocide would probably not be a fantastic look in the face of those accusations.  

Tesla has been trying to get broad regulatory approval for FSD in Europe for some time now, rather than the piecemeal nation-by-nation approach up until this point. The EU is coming to a broad vote, but some nations are trying to get in under the wire to signal their approval of the tech. Latest among them is Slovenia, which just approved FSD for use on its roads. From Reuters: 

STOCKHOLM, Sept 8 (Reuters) – Slovenia has allowed Tesla's FSD driver-assistance system to be used on ​its roads, the U.S. automaker said, becoming the sixth European ‌country to do so ahead of a potential EU-wide vote.

* "FSD Supervised now approved in Slovenia. Rollout will begin soon," Tesla wrote in a post, opens new tab on X on ​Monday that was reposted by CEO Elon Musk.

* Slovenia's Energy and ​Infrastructure Minister Jernej Vrtovec also reposted the announcement with ⁠the words "Developing Slovenia".

Slovenia, I swear to god, if Janja Garnbret gets hit by a Tesla running FSD I will flip out. You can't be putting arguably the greatest woman in modern rock climbing at risk like this. Now I have to hope for an EU-wide FSD ban, just to keep her safe. Also because it would be extremely funny to watch Elon flip out on Twitter about it. 

BYD wants to challenge the biggest carmakers on the global stage, and the company has realized it's going to need to sell a lot more cars in order to do that. The Chinese market is getting saturated, so BYD is increasingly turning to export sales for those numbers — numbers that, next year, are set to hit 2.5 million cars sold overseas. From Bloomberg: 

BYD Co. has set an ambitious target to sell more than 2.5 million vehicles overseas in 2027, accelerating its push beyond China where a fierce price war has eroded profitability.

The automaker also raised its 2026 overseas sales guidance to between 1.9 million and 2 million vehicles, from its previous goal of 1.5 million, according to a note from Deutsche Bank Research based on an investor briefing held Monday. BYD representatives didn't immediately respond to requests for comment on the targets.

The increase in exports — from as few as 45,000 in 2022 — underscores how China's largest electric carmaker is converting its dominant domestic position into a global footprint.

Going from 45,000 sales abroad to 2.5 million in four years is bonkers. It's no wonder that every other automaker is trying to replicate "China speed," to the point where Chinese automakers now offer that kind of engineering as a service. All those other automakers are now trying to shrink their own staff and manufacturing as much as possible, though, so best of luck to them on that. 

Speaking of carmakers downsizing to cut costs, Jaguar Land Rover is doing just that — cutting nearly one in ten of its workers globally in order to lower the company's break-even point. That point is the number of sales at which the company becomes profitable for a year, and JLR is targeting 300,000 cars for the benchmark. From Reuters: 

LONDON, Sept 7 (Reuters) – Britain's Jaguar Land Rover said on ‌Monday it would cut nearly 10% of its workforce through voluntary redundancies over the next two years, as the car industry faces heightened pressures including from Chinese competition and tariffs.

The luxury carmaker, which is owned by India's Tata Motors ​and has 17 sites in England, said it would cut around 4,000 jobs, targeting £1.7 billion ($2.30 ​billion) in savings and seeking to lower its break-even point towards 300,000 vehicles.

JLR ⁠employs about 43,000 people globally, including 34,000 in Britain, but did not say where the jobs would ​be cut.

Salaries are usually the largest expense to a company, and cutting them is an easy way for spreadsheet-brained MBA administrators to pat themselves on the back for quarterly profitability. Unfortunately for the long-term health of a company, though, all those people are generally being paid to do something — something the company will no longer be doing once that salary is removed from the balance sheet. Will JLR cut its engineering staff, and no longer innovate with future vehicles? Will it cut quality assurance, and deliver cars even more broken than before? 

They can't sue all of us! I mean, uh, all of them. Certainly never me. 

I picked a really great time to get a string of press cars, huh? At least they're not diesels. It's also good that diesel isn't the primary fuel for moving goods around the United States, because all those companies that move goods around would start passing the extra fuel costs on to consumers pretty quickly. 

There are precious few track titles on this album that I can actually properly type out in a blog, given the language filter, but I'm pretty sure neither Throat nor Goat will trigger it. Let's find out!