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Porsche, Golf volumes unscathed by Ukraine war, says VW CEO

·Finance Reporter, Yahoo Finance UK
·2-min read
Volkswagen  A sculpture featuring models of German car manufacturer Porsche is seen outside the Porsche factory in Stuttgart-Zuffenhausen, Germany, February 19, 2019. Picture taken February 19, 2019.   REUTERS/Ralph Orlowski
Volkswagen is in a tight battle with Tesla to top EV sales by 2025. Photo: Ralph Orlowski/Reuters

Volkswagen (VOW3.DE) said the supply chain disruptions caused by the war in Ukraine are now under control as its CEO said the race to become the world's largest seller of electric vehicles (EV) by 2025 will be tight.

VW has sold out of all new electric models until some time in 2023, mostly due to higher than expected demand.

"The supply situation in Ukraine is under control now, we've set up alternative sources for the wiring harnesses. I would say 90% of our volumes are safe," Volkswagen Group boss Herbert Diess said at the FT Future of the Car 2022 conference.

Diess expressed concern about the impact of a lengthy war in Ukraine and said that he would welcome a negotiated outcome to the conflict.

The CEO revealed his ambitions for 7% to 8% of the Volkswagen Group’s sales to be electric this year, rising to 25% by 2025 and 50%-60% by 2030.

Read more: UK new car sales sink over chip shortages

“Our goal is to be the world leader in EV sales by 2025. We have a very ambitious plan to achieve that and have invested hugely to achieve it, but some analysts aren't taking the amount of effort required to achieve our goals seriously enough,” he said.

Volkswagen will deliver no new EVs to customers in Europe and the US for the rest of 2022 as it has sold out of battery-powered models.

"We are not sold out because we can't build enough cars, we are sold out for electric cars because demand is higher than we expected initially.

"The pick up for EVs in many markets is really over our expectations. We would love to be able to build a few more cars, waiting times are just too long. You have to wait for your car for a year," Diess said.

VW, which includes brands such as Audi, Škoda and Porsche, has shipped more than 99,000 electric cars so far this year.

Read more: UK making 100,000 fewer cars due to parts shortage

The Volkswagen Group boss said the German manufacturer is likely to be in a tight battle with Tesla (TSLA) to top EV sales by 2025

"It will be a tight race but we won't give up on it," Diess said. "I have to say we didn't expect our main US competitor to be so fast and well-prepared."

Volkswagen is currently building six battery factories in Europe, each costing between €2bn (£1.7bn, $2.1bn) and €3bn, Deiss said, with 95% of that supply destined to European markets.

Watch: Volkswagen keeps outlook despite challenges

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