Volkswagen aims to double electric car sales in China

Volkswagen said it is likely to double sales of its ID battery electric vehicles in China this year and aims to do even better, but the automaker may be hampered by semiconductor shortages. The ID series that Volkswagen produces in its Chinese joint ventures with SAIC Motor and the FAW Group is the backbone of its EV ambitions in China, the world’s largest auto market.

The German automaker sold 70,625 of its ID electric vehicles in China last year, missing its target of selling 80,000 to 100,000 cars, in addition to chip-related issues hit by the regional COVID-19 outbreak.

Volkswagen’s China chief, Stephan Wollenstein, told a briefing in Beijing that the automaker would still like to double down on its original plan but that goal “is not secured by the semiconductor supply we currently see.”

However, he added that he was “quite positive that we would see actual sales doubling.” Wollenstein said Volkswagen Group, which along with its own brand owns other brands such as Audi, Lamborghini and Porsche, sold 3.3 million cars in China last year, down 14 percent.

The company aims to increase that number to about 15 percent or about 500,000 units this year, though he said that also depends on chip supply conditions.

A shortage of chips used in everything from brake sensors to power steering to entertainment systems has prompted automakers around the world to cut or suspend production, new and used amid strong demand from consumers. The prices of both the vehicles have been pushed up.

While China’s EV market is seeing very strong growth, most foreign automakers have fallen behind their Chinese counterparts in designing smart cars that appeal.

The market is now dominated by Chinese brands, led by BYD and Wuling – part of the GM Group but a local marque. While Tesla is at number three, it is the only foreign brand in the top 10.

“You don’t see Volkswagen. Players like Volkswagen, GM and Toyota have fallen far behind in China’s smart EV race,” said Bill Russo, head of consultancy Automobility in Shanghai.

According to Rousseau, about 15 percent of all passenger cars purchased in China since November last year were either battery electric cars or plug-in electric hybrids. In November alone, electric car sales accounted for 21 percent of China’s total passenger car sales.

© Thomson Reuters 2021

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