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Sales of Volkswagen’s electric cars fell by almost a quarter in Europe as demand for battery-powered cars stalled and buyers returned to gas-powered cars.
Electric vehicle (EV) sales fell 24% in the first three months of this year as high inflation and rising energy prices weakened demand.
Globally, sales of all-electric vehicles at the Audi, Skoda and Porsche owner company fell by 3% to 136,400 units, while internal combustion engine vehicle sales rose by 4% to nearly 2 million units. became.
The drop in EV demand comes as politicians in the region reconsider ambitious targets to cut subsidies and phase out petrol and diesel cars.
In September, Chancellor Rishi Sunak extended the ban on new sales of petrol and diesel in the UK from 2030 to 2035. Incentives for drivers buying new EVs will be phased out in 2022.
Demand for petrol cars is growing faster than electric models in the UK, data shows.
Figures released by the Automobile Manufacturers and Trade Association last week showed EV registrations rose just 3.8% last month from a year earlier, while gasoline engine sales rose 9.2%.
Volkswagen sells some of the UK’s most popular electric car models, including the Audi e-Tron range and Volkswagen ID.
Meanwhile, EU authorities are considering easing a similar ban on petrol and diesel cars in the region to allow the use of synthetic fuels, so-called e-fuels, that can power internal combustion engines.
Matthias Schmidt, founder of Schmidt Automotive Research, said Volkswagen was affected by the end of subsidies for electric vehicle sales in Germany. The EU has also frozen emissions targets for cars, causing sales to stagnate.
Mercedes-Benz also reported on Wednesday that EV sales fell 8% in Germany, citing the “abrupt end of tax incentives” and the phasing out of the brand’s popular electric models.
European automakers are facing increased competition from an influx of new electric vehicles made in China, putting pressure on Volkswagen’s EV sales. Brands such as BYD offer battery-powered cars at lower price points than their Western rivals.
The EU has launched an investigation into subsidies provided by the Chinese government to Chinese car manufacturers. Experts at Germany’s Kiel Institute estimate that BYD alone has received more than 3.4 billion euros (about 290 billion yen) in subsidies from China in recent years, Bloomberg reported on Wednesday.
BYD has been contacted for comment.
However, while sales of electric vehicles in Europe fell sharply, they increased by almost 91% in China, Volkswagen said.
Hildegard Waltmann, member of the Volkswagen Board of Management, said: “Our diverse product portfolio allows us to adapt our product portfolio to compensate for fluctuations in demand in one segment with others, as is the case with fully electric vehicles today. It gives us the flexibility we need.”
Volkswagen’s sales decline follows a sharp drop in deliveries at Tesla, the leading electric car maker in the West. Last week, Elon Musk’s business reported an 8% decline in sales for the March quarter.
Not all companies are struggling. BMW announced Wednesday that the company’s EV sales increased 28% in the three months through March. Shipments of battery-powered models such as i4, iX1, and i7 increased by 41% during this period.
However, evidence that drivers’ enthusiasm for electric vehicles is wavering has led multiple automakers to postpone plans to launch new electric vehicles.
Bentley, the British carmaker owned by Volkswagen, has postponed plans to launch its first electric car until 2026.
Lamborghini, another German car giant’s supercar brand, does not plan to start selling fully electric models until 2028.
Other automakers are also pulling back on expansion plans. Ford delayed production of two new electric models, while Mercedes-Benz earlier this year dropped plans to make all of its models electric by the end of 2030.
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