EV sales stall and China competition heats up for Volkswagen

The Volkswagen Group saw a challenging 2024, reporting a 2.3% decline in global deliveries across all its brands, totaling 9.03 million vehicles. While the company narrowly achieved its target of 9 million units, the drop reflects difficulties in key markets, particularly China, and slower-than-expected growth in electric vehicles.

Volkswagen’s sales in China, its largest market, fell by 9.5% to 2.93 million units, driven by intense price competition and increasing dominance by local automaker BYD. Once a market leader in China, Volkswagen has lost its top position to BYD, which has capitalized much better on the booming EV segment.

Steep EV decline in the U.S.

Despite the struggles, Volkswagen managed to stabilize its performance in the fourth quarter, approaching year-ago levels. However, the annual decline highlights German automakers’ growing challenges in retaining their foothold in the Chinese market, especially in EVs.

Volkswagen delivered 744,800 fully electric vehicles worldwide in 2024, a 3.4% decrease from 2023, more or less a status quo, while PHEVs gained roughly 5%. The EV share of total sales remained at 8.3%, but regional shifts have become evident.

While China saw an 8% increase in EV deliveries, the U.S. market experienced a steep 30% decline – a worry as the region reached a record of over 1.3 million EVs last year. In Europe, EV sales also dipped, affected by the discontinuation of subsidies in Germany. Nonetheless, Volkswagen maintained its position as the leading BEV brand in Europe, holding a 21% market share.

Models like the VW ID.4/ID.5 duo remained the top-selling EVs, accounting for 182,000 units. Other key performers included the ID.3 (149,100 units) and the Audi Q4 e-tron (107,700 units). The company’s EV order backlog in Western Europe stands at 170,000 vehicles, bolstered by new releases such as the VW ID.7 Tourer and the Audi Q6 e-tron.

Audi underperforms

While sales in China and Europe faltered, North and South America provided some relief. Deliveries in North America rose by 6% to nearly 1 million units, and South America saw a robust 15% increase, reaching 518,000 units. However, these gains were insufficient to offset declines in core markets like its home market Germany (-2.2%).

The Audi division emerged as a primary drag on overall performance, with a 12% drop in deliveries. As Newmobility. news reported earlier, Porsche also faced a 3.7% decline in EV sales. Meanwhile, Seat/Cupra and Skoda delivered promising results, growing by 7.5% and 6.9%, respectively. The VW core brand saw a modest 1.4% decline.

30 new models coming

Volkswagen is undergoing significant restructuring to address production inefficiencies and high costs. Plans include a 700,000-unit capacity reduction and a workforce cut of 35,000 jobs in Germany by 2030, achieved without forced layoffs. Additionally, collaborations with Chinese automaker XPeng aim to bolster the company’s EV competitiveness.

Despite setbacks, Volkswagen CEO Oliver Blume emphasized the group’s focus on profitability over volume, with thirty new models planned across brands in 2025. However, the company remains far from its pre-pandemic highs of nearly 11 million annual deliveries in 2019.