Volkswagen sticks to electric car output target and pricing despite slackening demand

Volkswagen confirmed it made €79bn in third-quarter sales, with operating profit rising 14% to €5bn. Picture: AP/Jens Meyer

Volkswagen is working to cut costs and sticking with its electric vehicle prices despite reductions at some rivals, as the German automaker aims to rebuild margins after quarterly profits were hit by bad bets on raw material prices.

A programme targeting €10bn in savings at its main passenger cars brand is delayed, but some measures have already been implemented, CFO Arno Antlitz said, confirming a Reuters report.

"There will be communication as soon as they are ready. We shouldn't be worried about a month or two delay," Mr Antlitz said of the plans.

The company, in the midst of a strategy shift to slash fixed costs and improve productivity, confirmed preliminary third-quarter results that cut its profit margin guidance for this year, disappointing investors.

"We cannot be satisfied with our profitability, which dragged behind our ambitious targets in the third quarter," Mr Antlitz said in a statement.

The carmaker's planning round, where it sets budgets for five-year spending, will conclude in mid-November, but Mr Antlitz said the company would no longer communicate results directly afterwards, instead updating shareholders at the company's annual news conference in March.

Volkswagen joined a chorus of carmakers and analysts warning in recent days that demand for electric vehicles (EV) is not developing as expected, with the German group's own order intake for EVs down to 150,000 in Europe from 300,000 last year.

Still, orders increased slowly in the third quarter from the first half and should rise further in coming months, Mr Antlitz said, adding the company was sticking to its targets.

In China, where Volkswagen has enjoyed a market-leading position in the combustion engine era but is now competing against a swathe of local producers, it may lose battery EV market share in the next year or two until the two models it is producing with China's Xpeng come to market, he added.

High interest rates are derailing the shift to EVs across the globe, underscored by the scrapping of a GM-Honda partnership and a warning from battery maker LG Energy Solution.

Meanwhile, Hyundai said it would not delay plans to roll out new electric vehicles and was upbeat about prospects for continued growth this year — a contrast to recent steps by rivals to cut back on EV output.

The Hyundai Motor Group said it planned to launch 31 EVs by 2030.

Subdued demand has prompted some EV makers, including Tesla, to cut prices.

Volkswagen confirmed it made €79bn in third-quarter sales, with operating profit rising 14% to €5bn.

The company said it still expected to deliver between €9m and €9.5m worth of vehicles to customers this year, and for group sales revenue to be 10% to 15% higher than in 2022.

• Reuters