“The future will be electric, that’s our conviction.” Sales of the world’s largest car manufacturer double in Europe

Orders for Volkswagen electric vehicles soared in Europe in the first quarter of 2024, compared to the previous year, contradicting the idea that drivers may be losing interest in electric vehicles.

New orders more than doubled in Europe, Volkswagen said this week, without however disclosing order numbers for other markets.

The jump in orders from Europe’s biggest car maker comes amid concerns about slowing electric vehicle sales on the continent and as manufacturers struggle with thin profit margins squeezed by growing competition.

“The future will be electric, this is our conviction,” Chief Financial Officer Arno Antlitz told analysts and journalists, acknowledging, however, that the pace of growth in electric vehicle sales in Europe and the United States was slower than what was initially foreseen by the German manufacturer.

Electric vehicle sales “will increase quarter over quarter, year over year, but not as quickly as we expected,” he acknowledged.

As for Volkswagen’s deliveries, they decreased by 16% in Europe in the first quarter compared to the same period in 2023. “All-electric deliveries in Europe were affected by supply bottlenecks,” a company spokesperson told CNN. “There is a time lag between order entry and delivery to the customer. The aforementioned supply bottlenecks affected delivery performance in the first quarter.”

Meanwhile, in China, Volkswagen’s biggest market, deliveries of electric vehicles almost doubled to 41,033 units, compared to a “weak figure from the previous year”, the company said.

The German manufacturing champion is fighting to defend its share of the Chinese car market – the largest in the world – where it has fallen behind Tesla and local electric vehicle producers such as BYD.

Volkswagen believes its plans to significantly reduce battery and materials costs will allow it to be cost-competitive with Chinese rivals by 2026. This should allow it to reduce the price of its electric vehicles in China, where competition fierce led to intense price wars.

“We are seeing a very difficult pricing environment” in China, noted Antlitz, adding that Volkswagen will make “solid compromises” between “prices and volume” in the country.

The German manufacturer plans to launch four new models in China over the next three years, two of which will be electric, while reducing the time to market for new products and features by 30%.

“With these actions and our highly profitable combustion engine car business, we are well prepared to continue to play a leading role in China”, said Antlitz.

According to a presentation to investors, Volkswagen intends to keep its market share in China stable at around 15% until the end of the decade.

The company’s profit fell 20% to 4.6 billion euros in the first quarter, hurt by lower sales and higher costs.

“As expected, our first quarter results show a slow start to the year. But we remain confident in achieving our financial objectives for 2024”, assured the financial director.

Volkswagen expects to pay 900 million euros in workers’ compensation costs this year as it reduces the size of its workforce as part of a 10 billion-euro cost-cutting program to boost efficiency.