HomeEuropeVolkswagen CEO says EV outlook is very good

Volkswagen CEO says EV outlook is very good

An ID. Buzz stands during a plant tour of the production of the ID. Buzz in quality control at the Volkswagen Commercial Vehicles plant in Hanover, Germany, June 16, 2022.

Ole Spata | Picture Alliance | Getty Images

The CEO of German automotive giant Volkswagen sought to assuage concerns about electric vehicle sales and semiconductor supplies on Thursday, predicting delivery times for EVs will get shorter as the year progresses.

“The outlook is very good, we have [a] very good order intake in Asia,” Herbert Diess told CNBC’s Annette Weisbach on Thursday.

Supply chain constraints — including those related to semiconductors — have proven to be a major challenge for automakers in recent times.

“We’re trying to keep delivery times short,” Diess said, “but we have a lead time of a year or so currently, so we are ramping up production … five assembly plants are coming into production now.”

Shares of Volkswagen traded up 5% on Thursday afternoon in London. The stock price is down over 28% year-to-date

“We will see a ramp-up in the second half of the year to really be able to reduce delivery times for our EVs,” he added. “There’s high demand in Europe and also in the United States.”

Semiconductors, Diess noted, still represented a bottleneck, but said this was likely to change soon. “We will see an alleviation through the next weeks,” he said.

Diess’ comments came on the same day his company broke ground on a cell factory in Salzgitter, Germany, and launched a battery company called PowerCo. In a statement, it said PowerCo would be “responsible for global battery activities of the Volkswagen Group.”

It added that, in the period up to 2030, PowerCo would “invest more than €20 billion [$20.4 billion] together with partners in the development of the business area, to generate annual sales in excess of €20 billion and to employ up to 20,000 people in Europe alone.”

By the year 2030, VW says it wants at least 70% of its European revenue to come from electric cars. In China and North America, its goal is at least 50% of revenue from EVs.

Earlier this year, VW announced plans to re-launch the iconic Scout brand as a fully-electric pick-up and “rugged” SUV, with prototypes due to be revealed in 2023 and production planned to begin in 2026.

The company is also concentrating on the development of vehicles such as the fully electric ID Buzz, which is inspired by the T1 Microbus or “hippie” van.

Read more about electric vehicles from CNBC Pro



Please enter your comment!
Please enter your name here

New Updates