VW electronic cars will soon have the same benefits as combustion engines

VW electronic cars will soon have the same benefits as combustion engines

Volkswagen wants to be as profitable in the sale of electric cars as in the business of combustion engines. “We anticipate that the e-mobility business will be as profitable as our combustion engine business sooner than planned,” CEO Herbert Diess said Thursday at an online conference. The reason is that the group continues with its module system and more models of cars, more factories are being converted to the production of electric cars and platform technology is also sold to competitors such as Ford. So far, Volkswagen thought that in two to three years it would make as much money for electronic cars as conventional combustion engines.

In view of the Ukraine war and the closure of China’s economic capital Shanghai, however, dark clouds are gathering economically. Diess said that Volkswagen has the capacity to handle disasters. “Thanks to good crisis management, we are financially stable and have strengthened our resilience.” Management will continue to move forward with restructuring in 2022, despite geographical and economic challenges.

Adjust the supply condition

Diess has hinted at simplifying the extra supply problems caused by the Ukraine war – but in his estimation the conflict will not end soon. “We assume that the supply chain will balance even if the war continues for a long time,” said the manager of Europe’s largest automotive company. However, the economic sanctions imposed on Russia so far have not had the intended effect: “The prospect of an immediate end to the war with severe sanctions has not been fulfilled.”

Notwithstanding this, the Executive Director warned of the permanent isolation of the Russian Federation or other regions. “An early swan song to the style of ‘transformation through business’ does not go far enough. Creating a camp cannot be our answer.” Global problems such as the “climate catastrophe” can only be solved together.

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From a detailed perspective

In addition to the constraints in the supply of urgently needed microchips, the results of the most complex distribution chain have plagued the industry since the beginning of the war. These include, above all, the lack of cable harnesses that retailers produce in Ukraine. “We were able to significantly compensate for the loss of production in Europe,” Diess said. Among other things, Volkswagen expanded production in South America and China – but this is not a long-term solution.

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