Automotive News Europe — 2024-01-11
Automotive Industry
Volkswagen Group’s finance chief said the automaker remains flexible on how it spends money earmarked for electric and combustion-engine cars as EV uptake slows in some markets.
The company is seeing some reluctance on EVs in Europe and perhaps the US, Chief Financial Officer Arno Antlitz said Wednesday in an interview with Bloomberg Television.
“Our strategy is rather flexible and also provides robustness and flexibility going forward,” Antlitz said, adding that around a third of its investments are meant to keep combustion-engine models competitive.
“But we are fully convinced that the future will be electric.”
VW is implementing cost cuts to boost returns at its underperforming namesake brand alongside significant investments to regain momentum in China, where local EV brands and Tesla have raced ahead.
Its premium brand Audi last month said it’s paring back its EV rollout to avoid burdening factories and dealers amid slower growth in EV sales.
Meanwhile, the company is targeting North America to reduce reliance on China. VW has been hit in the US because of a lack of SUVs and pickups.
VW now has “all the ingredients” to be successful in North America as the industry shifts to EVs, including competitive batteries it will be making in Ontario, Canada, Antlitz said.
The company is reviving the Scout offroad brand to start making all-electric models from 2026 at a $2 bn battery and a vehicle plant in South Carolina.
VW is adding the new EV brand just as the pace of demand growth in the US is starting to trail forecasts, owing to tougher economic conditions as well as high EV prices that still make combustion cars more attractive.
The company is also struggling with orders for some of its EVs in Europe, laying off temporary workers and cutting shifts at its German factories last year.
Selling more models like the Atlas and ID4 SUVs in the US is already paying dividends.
Sales in North America rose 18% to just under 1 m vehicles last year, even as that is still dwarfed by the more than 3.2 m deliveries to China.
In 2023, EVs accounted for 8.3% of VW’s total vehicle deliveries — toward the lower end of the company’s targeted range.