German automaker Volkswagen is set to close a plant in its home country for the first time in the company's history, following a year where it faced crippling tariffs and lagging sales across all of its major markets.

The New York Times reports that VW's 24-year-old plant in Dresden, Germany, is scheduled to cease production on December 16, and will soon be converted into a research hub for artificial intelligence, robotics and chip design. All 230 workers at the facility will be offered severance, retirement packages, or the option to transfer to another plant.

“We did not take the decision to end vehicle production at the Transparent Factory after more than 20 years lightly,” VW CEO Thomas Schäfer said in a news release. "From an economic perspective, however, it was absolutely necessary."

Volkswagen reported $1.5 billion in third quarter operating losses, due in large part to financial pressure from U.S. tariffs, and the company's expensive move away from electric vehicles for its Porsche brand. VW estimates that tariffs will cost it more than $5.7 billion by the end of the year, and expects Porsche's shift away from EVs to cost it an additional $5.4 billion. Q3 marked the first time in five years that VW had reported quarterly losses.