Volkswagen is quickly ramping up its electric car sales in Europe, as regulators push automakers to ween themselves off fossil fuels. In 2021, VW is expected to double its production of electric vehicles to around a half-million. Tesla aimed to deliver a half-million electric vehicles in 2020 but just missed that guidance. In 2021 Tesla CEO Elon Musk has said the company will deliver “in the vicinity” of 840,000 to 1 million electric vehicles. Not too many more than VW. For comparison’s sake, Tesla’s market cap is $672 billion, while VW’s is around $132 billion. In addition to its electric vehicles, Volkswagen delivered around nine million ICE and hybrid model automobiles as well.
The FT reports on VW’s plans for next year, writing:
Volkswagen plans to sell 1m electric or hybrid cars this year — a near tenfold increase since 2019 — as the German carmaker sets its sights on a recovery in profits after the pandemic.
Sales of battery-only cars tripled to 231,000 in 2020, but the company expects an even faster take-up this year, boosted by new model launches.
Of the 1m electric cars it expects to sell, about half will be battery-only, with the rest plug-in hybrid models, chief executive Herbert Diess told the Financial Times.
VW also expects its profit margins to recover to the upper end of the 5-6.5 per cent guidance window for the year, up from 4.8 per cent during 2020.
This is lower than the 7.6 per cent it hit in 2019, and lower than the long-term target of 7-8 per cent.
Arno Antlitz, who takes over as chief financial officer of VW in April, said this year was “not risk free” because of the slow recovery from the pandemic, and the chip shortage that has crippled the industry.
Diess said the group will be unable to claw back lost production in the back end of the year because its factories are due to be full.
“We expect to be at the limit of our capacity, so we will not be able to recover,” he told the FT.
The German carmaker has not yet quantified its likely profit impact, but said it expects to make 100,000 fewer cars over the first quarter.
Carmakers are ramping up electric sales as tightening rules in Europe and China force them to cut carbon emissions or face large fines.
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