Volkswagen already sold electric cars in key markets this year

CNN Business

Volkswagen Group, Tesla’s main global competitor (TSLA), sold all electric cars in the United States and Europe this year due to growing demand and supply constraints.

“We’re not burnt out because we can’t build cars… we really are burnt out for electric cars because demand is higher than expected,” CEO Herbert Diess told the Financial Times at its auto conference on Monday.

Last week the company, which owns several brands including Porsche and Audi, said it had an backlog of 300,000 EVs in Western Europe alone.

Customers who order now in some markets can expect to receive their cars next year, a company spokesperson confirmed to CNN Business.

Volkswagen Group sold more than 99,000 electric vehicles globally in the first quarter, 65% more than in the same period last year. Their most popular cars included their ID.3 and ID.4 models, and the Audi e-tron.

Volkswagen still trails Tesla, which delivered more than triple the number of electric vehicles during the same period.

It may have a chance to make up some lost ground later this year as chip supply improves. The supply chain disruptions that have blighted the auto industry over the past year were beginning to abate, and Volkswagen Group has a “very good supply of semiconductors” from the third quarter, Diess said.

Volvo (VOLAF), a competitor of the Volkswagen Group, also believes that the worst of the chip shortage is over. CEO Jim Rowan told the FT on Monday that he believes his company will be “really strong in terms of chip supply” from the second quarter.

The war in Ukraine has exacerbated supply problems for the auto sector, leading to shortages of key parts for all vehicles.

But Diess said the company, which has several parts suppliers in Ukraine, still managed to secure around 90% of its supply volumes from those plants.

And despite strict coronavirus lockdowns, demand for electric vehicles within China is proving resilient. Diess said the Volkswagen Group’s electric vehicle sales in the world’s largest car market quadrupled in the first quarter.

BYD, a Chinese electric vehicle manufacturer, reported a 313% increase in sales of its electric and plug-in hybrid vehicles in April compared to last year. The Warren Buffett-backed company is more protected than others from supply chain disruptions because it makes its own car batteries and chips. Rivals Li Auto and Nio reported a drop in deliveries in April.

“I’m optimistic that even in these really difficult circumstances with Covid in China, the war in Ukraine, and still some semiconductor constraints, 2022 could be a good year for us and the rest of the industry,” Diess said.

Laura Contributed reporting.

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