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Volkswagen Electric Car Sales Disappoint, But Should Rally In 2nd Half Of 2021

Volkswagen Electric Car Sales Disappoint, But Should Rally In 2nd Half Of 2021

“Critics say VWs don’t have enough advanced self-driving and voice-controlled features valued by young, wealthy Chinese”

Volkswagen is the lead dog auto manufacturer in the global race to electrify, but it’s ambitious plans have stalled for the moment and investors are getting nervous, although some analysts think worries have been overdone.

The worry has been reflected in VW’s share price, down 12% over the past month in an overall market about 4% lower as measured by the STOXX Europe autos index. It closed in Europe Wednesday at €277.00, up 1.7%.

Bernstein Research pointed out in a note to clients that VW’s monthly electric vehicle selling rate needs to double from a recent 33,000 to 70,000 if the overall target for the year of 600,000 battery electric vehicles (BEV) is to be reached. Sales of the ID.3 and ID.4, first iterations of the VW family of BEVs have been slower than expected. 

“Maybe there aren’t any issues, maybe there are no product specific things to worry about, maybe consumers just need more time and maybe VW’s launch schedule still needs to unfold full momentum. Also, after the push in Q420, overall BEV sales were slow in Europe in Q1. In any case, investors need more clarity on these topics,” Bernstein Research said.

The Financial Times Lex column said VW’s sluggish start to electric vehicle sales is “puzzling”, as it pursues its ambition to lead the world in BEV sales. Lex says European sales have been slow, but that was because some sales were brought forward reacting to EU CO2 targets for 2021. But weak sales in China were alarming.

“Competition is intense there (in China). Volkswagen suffered by launching later than Tesla and local rivals. Critics say the German maker’s models do not have enough of the advanced self-driving and voice-controlled features valued by young, wealthy Chinese customers,” Lex said.

Still on target
Lex quoted VW saying Chinese sales are still on target to meet this year’s BEV goals.

German-based auto analyst Matt Schmidt isn’t surprised by VW’s BEV performance.

“If you look at VW’s strategy for 2021 it appears they are expecting exactly that – volumes to double in Q3/Q4 over Q1/Q2,” Schmidt said.

Schmidt publishes The European Electric Car Report (

Schmidt agrees VW’s BEV sales were brought forward because of EU CO2 fleet technicalities, while the roll-out of the ID.3, VW’s first custom built BEV, was delayed by software problems. A delay in the software fix inhibited sales through the opening months of 2021.

“In short, a low inventory in Q1 following the end of year 2020 CO2 push combined with VW holding back volumes until a software patch was fixed impacted a poor start to the year,” according to Schmidt.

VW BEV sales will be boosted later this year as output of the VW ID.4, Audi Q4 e-tron and Skoda Enyaq gather pace. Chinese BEV production began in the second quarter, Schmidt said.

There is another possible reason Chinese volumes are disappointing.

“Perhaps it is VW China’s strategy to continue to push more profitable ICE (internal combustion engine) models for the next two years in order to finance their Chinese EV transition,” Schmidt said.

This would mean buying credits from other electric car makers, possibly Tesla, he said.

Lex points out that shareholders so far have remained sanguine. The recent fall in the share price still left it up by more than 40% this year.

“But shareholders will become twitchy if sales do not pick up soon. Much rides on VW’s appeal to Chinese electric vehicle buyers. Hopes of knocking Tesla off its stop spot in global EV sales depends on it,” Lex said.

Over the next 5 years, VW will spend about $55 billion electrifying is cars and SUVs across all its brands. In 2025 VW expects 25% of its global sales to be BEVs, growing to 55% to 60% by the early 2030s. VW recently raised its sales target for BEVs plus plug-in hybrid electric vehicles (PHEV) in Europe to 70% by 2030, up from 35%. All ICE production for VW brand will stop in Europe by 2035.


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