Volkswagen ID.4 Drives Strong EV Sales

We’re entering the time of year when automakers release their first-quarter sales results, and Volkswagen’s are among the first out of the gate. The German auto giant saw increases in some areas, most notably in operating profit and EV sales, but is clear-eyed in its realization that significant challenges lie ahead.

Volkswagen’s operating profit grew to €513 million (around $539 million), up from €490 million ($515 million) in the same period the year before. Sales revenues fell from the first quarter of 2021 to €15 billion ($15.7 million). Total vehicle deliveries tallied one million units, a decrease from 2021’s 1.36 million. The automaker blames parts shortages and war for the drop in deliveries, but it has other reasons to be optimistic.

Volkswagen says it delivered 53,400 electric vehicles in the first three months of the year, up 74 percent from 2021. More than half of its sales came from the new ID.4, which VW notes sold 30,300 units. The electric SUV has been massively popular for VW, and the automaker’s already rolling out improvements via over-the-air updates.

Volkswagen moved some cars in the first quarter, but it’s got a long way to go before digging itself out of the hole it’s in. The automaker says it has a historic backlog of more than 670,000 vehicles in Europe, and it stated earlier that new orders will take until 2023 to fulfill. In May, VW will open a new ID.4 production line at its plant in Emden, Germany, and later this year, Chattanooga will begin producing the electric crossover.

In addition to rising to meet the demand, Volkswagen wants to improve its cost efficiency, citing Russia’s invasion of Ukraine and the ongoing effects of the pandemic in China as notable disruptions. The automaker believes that cutting costs and improving quality will help it buffer against shifting international winds. Still, it’s careful to note that its outlook depends on how the war in Ukraine proceeds and how it impacts VW’s businesses.

The Wolfsburg-based automaker expects to shift 25 percent of its sales to electric vehicles by 2026, which is a big jump from the 5 to 6 percent we see today. To get there, VW will invest billions in its charging network, facilities, and vehicle development efforts, including a target of $7.1 billion in North America, where the company says it will introduce 25 new EV models by 2030.