Shipments of its electric cars, which include the ID.3, fell by 24pc in Europe in the first three months of the year and dropped 16pc in the US. In May, VW indefinitely delayed the launch of its latest EV sedans in the US – a market it has long struggled to crack.
Drivers have gone off EVs globally as electricity prices have risen, while the cost of buying a new EV upfront has remained stubbornly high.
Despite this, VW must invest: the German business faces EU fines if it fails to boost its electric car sales and misses fleet emissions targets.
The carmaker plans to invest close to $200bn on the shift to electrification and converting massive plants such as Zwickau to pump out EVs. However, VW, which also owns Audi, Porsche and Seat, has been widely viewed as behind the pack on the technology and an accompanying shift towards smarter, more digitally connected cars.
Playing catch-up is costly and money is in increasingly tight supply. The €56bn (£47bn) carmaker has lost roughly half its value from its peak in 2021 – while the “dieselgate” cheating scandal of 2015 and the ensuing fallout has cost the business tens of billions of dollars in legal fees and fines.
Windsor, who runs the Radio Free Mobile blog, said VW was “in an almighty mess”.
In a meeting with staff last year, senior executive Thomas Schӓfer told staff “the roof is on fire”, while the brand’s finance chief told employees on a call “our vehicle business is unwell”.
Adding to woes is the fact that the carmaker is caught in the middle of a trade war between the European Union and China – a crucial market for sales. Cheap Chinese electric car brands are flooding Europe, leading to the threat of punitive tariffs from Brussels and counter threats from Beijing.
VW’s business in China is already struggling. Much has been made of Tesla’s tussle with China’s BYD for dominance in Asia, but VW has also suffered. The company lost its title as the best-selling car brand in China to BYD in 2022. Its market share has fallen from 19.3pc in 2020 to around 14.5pc as demand for petrol cars dipped, and it has been on the defensive.