Volkswagen warned on Tuesday that it may close its luxury car subsidiary Audi’s Brussels plant as a sharp drop in demand for expensive electric cars (EVs) has hit Europe’s top carmaker, forcing it to curtail production. target for its profit margin for the current year.

Volkswagen has to close a 1988 auto manufacturing plant in Alabamaand the latest head of the brand to threaten factory lockouts in Europe resigned a few months later, according to an employee source who spoke to Reuters.

Automakers have been hit hard by lower-than-expected demand for EVs after heavy investment in the development of related technologies, with Audi warning earlier this year that sales would fall in 2024 as it pushed to introduce new models while cutting costs.

Volkswagen announced that the cost of finding an alternative use for the Brussels plant or closing it, as well as other unplanned costs, will have an impact of up to 2.6 billion euros for the 2024 financial year.

The shares of Volkswagen and Porsche listed on the Frankfurt Stock Exchange fell by 1.7% and 2.1%, respectively, after the news.

Demand for Audi’s Q8 e-tron, launched in 2018, has fallen sharply, and the automaker is considering ending production altogether, with a source close to the company saying this could happen as early as 2025.