Volkswagen faces a bumpy road ahead - misses Q3 targets

Electric vehicles represent the automotive industry's most transformative shift in a century. However, not all giants of yesteryears are coasting smoothly in this transition. The most recent exhibit: Volkswagen. While Europe’s behemoth automaker has witnessed growth in its electric vehicle deliveries, there seems to be a hiccup when it comes to new EV orders.

In the span of just the first nine months of the current year, Volkswagen proudly dispatched 531,500 electric vehicles – a significant 45% leap from last year’s figure of 366,600. Europe has been the darling region for VW, absorbing 341,100 of these vehicles, or 64% of the total. In fact, it's worth raising an eyebrow at the fact that Volkswagen's EV market share touched 9% in Q3 in Europe.

But Europe isn't the only region where Volkswagen is accelerating its sales. The United States has shown a substantial appetite for Volkswagen's EVs as well, witnessing an impressive 74% growth over last year with 50,300 deliveries. Even in China, where sales had previously been less than enthusiastic, Volkswagen experienced an 11% uptick in Q3 after a minor 1.6% decline through June. The Volkswagen ID.4, ID.5, ID.3, and Audi Q4 e-tron topped the list of VW’s best-selling electric models during this period.

However, beneath this veneer of sales growth lies a concerning trend. The company has openly admitted that it’s struggling to gain traction in new EV orders. To quote Hildegard Wortmann, who supervises VW’s marketing and sales, “Our order intake is below our ambitious targets due to the lower-than-expected overall market trend.” Sounds like there's a wrench in the machinery, doesn't it?

Now, one might wonder, what's keeping Volkswagen from racing ahead full-throttle? It seems a combination of a mounting backlog, due in part to supply chain and logistics nightmares, is to blame. These hitches have led to lengthier delivery times – a major turn-off for eager customers. And the repercussions aren't limited to customer dissatisfaction. Volkswagen had to revise its guidance downwards earlier this year. It now expects an 8% to 10% share in EV sales, a dip from the earlier 11%. Such challenges even forced the company to reduce temporary workers and halt production at a couple of their German facilities just last month.

Yet, hope springs eternal. Volkswagen is gearing up to roll out its flagship EV, the ID.7, in key markets of Europe, North America, and China. Europeans who fancy this model could place their pre-orders since August with a price tag of $62,000. Chinese customers can look forward to the ID.7 Vizzion, courtesy of VW's collaboration with FAW. North America will be introduced to the ID.7 next year.

Still, in the grand scheme of things, Volkswagen has a marathon to run. With electric juggernauts like BYD and Tesla leading the pack, Volkswagen has some serious catching up to do. BYD even nudged past Volkswagen to clinch the title of China's top-selling automaker. Volkswagen's strategy? Price slashing on their ID.3 and ID.4 models. But here's the million-dollar (or in this case, perhaps multi-million) question: Just how sustainable is this strategy?

Via