Volkswagen deliveries fall in 2024 as electric push slows

Volkswagen's deliveries fell last year, the German carmaker said Tuesday, underlining fierce Chinese competition and faltering demand for electric vehicles.

The 10-brand group, which includes Audi, Porsche and Lamborghini, sold 9.03 million vehicles last year, down 2.3 percent from 2023.

But in China, VW's second-largest market by volume, deliveries plunged 9.5 percent.

Marco Schubert, responsible for sales operations at the firm, said an uptick in the last three months of the year was promising.

"In the final quarter we again approached the previous year's volume in China," Schubert said. "We have created a good starting point for this year."

However, analyst Pal Skirta from Metzler Bank said Volkswagen's troubles in the country were unlikely to pass soon.

The carmaker has been outmanoeuvred by local firms such as BYD and Xpeng, who have developed affordable EVs with the kind of entertainment software that Chinese drivers expect, he said.

"Volkswagen was still living in the old world of combustion engines and they neglected how quickly competitors like BYD were developing until recently," he said.

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"Chinese manufacturers, they don't have this kind of legacy business, the combustion engine business. They could concentrate all their efforts on electric vehicles and software."

Worldwide, Volkswagen's EV deliveries fell 3.4 percent in 2024. EV sales in the United States dropped 30.5 percent while in Europe they were down 5.2 percent.

The European Union plans to force the transition to electric cars in an effort to combat climate change. A ban on the production of combustion engine vehicles is planned for 2035.

However, state support for EVs has been patchy. Germany, Volkswagen's home market, abolished subsidies for electric cars at the end of 2023.

Volkswagen is one of a number of European carmakers struggling in the face of fierce Chinese competition and the switch to EVs.

BMW warned investors in November that its performance for the year would fall short of expectations, citing weak demand for its cars in China.

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Stellantis, whose brands include Jeep, Peugeot and Fiat, likewise said in September that Chinese competition would hit its performance.

In December, Volkswagen reached an agreement with unions to cut 35,000 jobs across Volkswagen's German locations by 2030.

The company said the drastic cuts should save around four billion euros ($4.1 billion) a year in the medium term and avoid plant closures in Germany, which Volkswagen had previously warned might be required.

The Volkswagen group publishes its full financial results for 2024 on March 11.

Source: AFP