Volkswagens EV sales slip in Europe but soar in China

Sales of electric models from the Volkswagen Group showed strong regional differences in the first quarter of 2024. While sales fell significantly in Europe and the US, the Chinese market stood for outstanding growth. To further cement its position in China, the brand Volkswagen has announced an investment of 2.5 billion euro to expand its activities.

The pattern for electric car deliveries is not different at the Volkswagen Group than for most other brands. Compared to the same period last year, sales rose from 136,400 to 141,000 units. But next to the final quarter of last year, a significant drop of roughly 100,000 units is witnessed. It demonstrates once more how the global vehicle market is rising, but the uptake of electric models keeps lagging.

Optimism for the period ahead

A stronghold for the VW Group is China, where electric car deliveries soared by a staggering 91%, overshadowing the downturn in Europe (-24%) and the US (-16%) . However, though the percentage in the Chinese market is impressive, the total share remains modest, representing only 5.9% of total sales. In total, the Group delivered 2.1 million vehicles, representing 6.5% of overall deliveries, down from 6.9% in the final quarter of last year.

Nonetheless, Volkswagen shows optimism for the following quarters. The company says that twice as many EVs were ordered during the first three months of 2024, sufficiently filling the pipeline. On a brand level, Skoda and VW Commercial show strong progress, with Audi only marginally increasing and Porsche braking. The latter is in a difficult moment of its model cycle, as the Taycan was only recently facelifted and the Macan EV just launched. The bestseller of the VW Group is the ID.4/ID.5, followed by the ID.3 and the Audi Q4 e-tron.

Backing Scholz with €2.5 billion

To regain ground in China, where the VW brand was a top seller before BYD took the crown last year, the Group pledged an investment of 2.5 billion euros in its production and innovation center in Hefei. The announcement came at exactly the time when German Chancellor Olaf Scholz paid a visit to his colleague Xin Jinping to discuss current trade and affairs between the two nations.

Volkswagen’s new investment will expand its subsidiary, Hefei, increase its research and development capacity, and help finance the design of two car models under development with XPeng.

Last year, Volkswagen acquired a minority stake in the Chinese automaker. Volkswagen CEO Ralf Brandstätter said, “With our ‘In China, for China’ strategy, we have a solid plan and are accelerating the realignment of our activities, with greater customer focus, acceleration, and more local development.”

One of the Hefei Centre’s primary goals is to accelerate the development window. The trajectory from the drawing board to the production hall already happens 30% faster (36 months), while testing and quality control have been reduced from three months to one. For the first, Zeekr manages a window of 24 months and Tesla 18 months.