Volkswagen plans to double sales of electric cars in China this year after missing targets

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Volkswagen said it will likely double sales of its ID battery electric vehicles in China this year and aim to get even better, but the automaker could be crippled by a semiconductor shortage. The ID series, which 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 automotive 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, with production being affected by regional COVID-19 outbreaks as well as chip-related issues.

Volkswagen’s China boss Stephan Wollenstein said at a briefing in Beijing that the automaker would like to double its original plan, but that goal “is currently not secured by the semiconductor shipments we are currently seeing”.

However, he added that he is “fairly certain that we will see actual sales double”. The Volkswagen Group, which owns other brands such as Audi, Lamborghini and Porsche in addition to its own brand, sold 3.3 million cars in China last year, a decrease of 14 percent, Wollenstein said.

The company is aiming to increase that number by about 15 percent, or about 500,000 units, this year, although that also depended on the chip supply situation.

The shortage of chips, used in everything from brake sensors to power steering to entertainment systems, has led automakers around the world to cut or stop production, which increases new and used car prices in the face of robust consumer demand Height drives.

While China’s EV market is growing very fast, most overseas automakers are lagging behind their Chinese counterparts in developing attractive smart cars.

The market is now dominated by Chinese brands, led by BYD and Wuling – part of the GM group but a local brand. While Tesla ranks third, 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 races, ”said Bill Russo, head of management consultancy Automobility in Shanghai.

Around 15 percent of all cars bought in China through November last year were either battery electric cars or plug-in electric hybrids, according to Russo. In November alone, electric car sales accounted for 21 percent of total car sales in China.

© Thomson Reuters 2021

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