VW aims to sell 1m electric cars this year

Volkswagen plans to sell 1m electric cars this year — a tenfold increase since 2019 — as the German carmaker sets its sights on a recovery in profits following the pandemic.

Sales of battery cars tripled to 231,000 in 2020, but the company expects an even faster take-up this year, boosted by new model launches.

VW also expects its profit margins to recover to the upper end of the 5-6.5 per cent guidance window for the year, up from 4.8 per cent during 2020.

This is lower than the 7.6 per cent it hit in 2019, and lower than the long-term target of 7-8 per cent.

Arno Antlitz, who takes over as chief financial officer of VW in April, said this year was “not risk free” because of the slow recovery from the pandemic, and the chip shortage that has crippled the industry.

Chief executive Herbert Diess said the company was unable to quantify the financial impact of the shortages, and the business is unlikely to replace all of the lost orders.

Carmakers are ramping up electric sales as tightening rules in Europe and China force them to cut carbon emissions or face large fines.

VW missed its European CO2 targets in 2020 because of delays to the launch of its key ID.3 electric car, leaving it facing a fine that could reach €200m.

But the company plans six new models this year based on its electric MEB platform, as well as a full year of sales of its ID.3.

The group expects one in five cars sold by the group to be electric by 2025, rising to 50 per cent by the end of the decade.

VW has refrained from setting an end date for sales of combustion-engine vehicles, unlike some other carmakers. However, its carbon neutral by 2050 pledge means it is likely to stop selling vehicles with engines by 2040.

VW on Tuesday broke down the performance of its various brands after revealing profits in 2020 of €10bn in January following a late recovery last year in China.

Despite the pandemic, Porsche saw profits fall by just 4.5 per cent to €4bn, while Bentley suffered a 70 per cent drop and Audi was hit with a 40 per cent decline as the main VW brand scraped a profit.