Orders for Volkswagen's electric cars have doubled in Europe.
Electric car orders in Europe more than doubled, Volkswagen revealed in an earnings update on Tuesday. The company doesn't disclose sales figures for other regions.
This news emerges as concerns surface about the potential decrease in EV sales in Europe, and as automakers face narrow profit margins due to growing competition.
According to Arno Antlitz, Volkswagen's Chief Financial Officer, "The future is electric, this is our belief." However, he also acknowledged that the rate of EV sales growth in Europe and the US has been slower than the carmaker initially predicted.
Regarding Volkswagen's own EV deliveries, they dropped 16% in Europe in the first quarter compared to the same period in 2023. "All-electric deliveries in Europe were affected by supply issues," a company spokesperson explained to CNN. They added that the timeline between receiving orders and supplying customers had been affected by these supply issues, impacting deliveries in Q1.
Meanwhile, in China, Volkswagen's largest market, EV deliveries nearly doubled to 41,033 units from a low number in the previous year. "In China, Volkswagen's single biggest market, our EV deliveries nearly doubled," the company stated in a release.
Volkswagen, the leader in German manufacturing, is finding it tough to maintain its position in China's car market - the largest in the world - where it has been overtaken by Tesla and local EV manufacturers such as BYD.
Volkswagen's plans to drastically reduce battery and material costs will allow the company to compete with Chinese rivals by 2026. This, in turn, will allow the carmaker to lower the price of its EVs in China, where fierce competition has led to cutthroat price wars.
Antlitz commented, "On EVs, you see... a very challenging pricing environment" in China. He further stated, "We will make sensible compromises between 'pricing and volume' in China."
The automaker plans to launch four new models in China over the next three years, two of which will be electric. Furthermore, it intends to cut the time it takes to introduce new products and features by 30%.
"With these measures and our highly successful internal combustion engine car business, we are well-equipped to continue to lead the way in China," Antlitz asserted.
Volkswagen aims to maintain its market share in China at around 15% by the end of the decade, as shown in a presentation to investors.
The carmaker's profits slid 20% to €4.6 billion ($4.9 billion) in the first quarter, impacted by lower sales and higher costs.
"As forecast, our first-quarter results show a sluggish start to the year," Antlitz said in a statement. Nevertheless, he remained optimistic: "We are still confident of meeting our financial targets for 2024."
Volkswagen anticipates shelling out €900 million ($965 million) in severance costs to employees this year, as it reduces its workforce as part of a €10 billion ($10.8 billion) cost-cutting program meant to increase efficiency.
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Source: edition.cnn.com
