Volkswagen expects EV sales in China to double
Volkswagen expects to sell twice as many electric vehicles in China this year as it will in 2021.
Last year, Volkswagen sold 93,000 electric cars in the world’s largest car market, four times as many as in 2020.
Volkswagen now has five electric models from the eponymous brand in China, its largest market.
Volkswagen AG will sell at least twice as many electric vehicles in China this year as it will in 2021 as the world’s No. 2 automaker ramps up efforts to unlock growth potential in the country.
Last year, the German auto giant sold 93,000 electric cars in the country, four times as many as in 2020.
The China Passenger Car Association estimates that total sales of electric cars and plug-in hybrids will reach 5.5 million in the country this year, up from 2.98 million in 2021.
Volkswagen now has five electric models from the eponymous brand in China, its largest market. The premium subsidiaries, including Porsche and Audi, also have electric models on offer.
The growing number of models and a new sales approach aimed at younger customers, including 120 pop-up stores in Chinese malls, will help 2021 sales double this year, Volkswagen said.
Herbert Diess, CEO of Volkswagen AG, said electric vehicle sales in the final months of 2021 were in line with Chinese competitors, including New York-listed Xpeng and Nio.
“We had a bit of a slow start, yes, accepted. But at the end of last year we already had a circulation of 15,000 copies. Now we want to at least double and that should happen,” he said.
Volkswagen launched its first model based on its electric car platform in China in the first half of 2021. Within months, it became the second most popular electric car maker in the country, behind Tesla of the US.
Despite making inroads into the booming but highly competitive sector, Volkswagen still has a long way to go before it becomes as established as it has been in the gasoline vehicle segment in China, analysts said.
Last year, the company shipped 3.3 million vehicles to the country, 97.2 percent of which were gasoline vehicles, giving it a 16 percent share of the world’s largest vehicle market.
Volkswagen said it is “nearly twice the size” of its closest competitor, even though its production in the country has been disproportionately affected by the semiconductor shortage.
The Volkswagen brand alone had a market share of 11 percent in China last year. The premium subsidiaries Porsche, Bentley and Lamborghini also achieved sales records.
Last year, chip shortages reduced the group’s production by at least 630,000 units in the country, according to Stephan Woellenstein, CEO of Volkswagen Group China.
Global production fell by around 2 million units and sales of 8.9 million units fell 6.3 percent from 2020, the lowest in a decade.
The group could have sold significantly more vehicles in 2021, but was unable to meet the high demand due to a shortage of semiconductors, the carmaker said.
However, sales rose 12 percent year-on-year to 250 billion euros ($274.4 billion) as the automaker allotted more chips to higher-margin models and reduced sales incentives.
The automaker said it has reason to be optimistic about 2022 amid the receding COVID-19 pandemic and slowing semiconductor supplies, but geopolitical tensions in Europe are affecting raw materials sourcing and associated supply chains.
Diess said Volkswagen is building additional wiring harness capacity for Europe and shifting car production to regions like China and America.
“Volkswagen has proven its resilience in recent years and will also master this crisis,” he said.