SHANGHAI - Volkswagen China on Friday stuck to a goal of doubling sales of its ID series of electric vehicles this year despite COVID-19 disruptions, with its chief calling the target "promising."
The ID series, which Volkswagen produces at Chinese joint ventures with SAIC Motor and FAW Group, is the backbone of its EV ambitions in China, the world's largest auto market.
VW is expecting to deliver 15,000 to 20,000 of the ID vehicles per month in the current quarter and beyond, Stephan Wollenstein, the company's China CEO, told a media briefing on Friday.
"We hope that we can also get the necessary parts in place," Wollenstein said. "By doing so, we will then be able by the end of the year to have sales of IDs more than double compared to last year."
The champions of the combustion age - European, U.S. and Japanese automakers - are falling behind local automakers in the booming EV market in China, a country that is key to funding and developing their electric and autonomous ambitions.
Volkswagen is no exception, even as the German automaker tries to accelerate electrification with the launch of the ID series of EVs last year.
The German carmaker first set out the target in January of doubling sales of the ID battery EVs in China this year from the 70,000 units it sold in 2021.
While suffering disruptions from recent COVID lockdowns at major manufacturing sites, the company said it sold 59,400 ID EVs in China in the first six months this year, contributing to 80 percent of its total EV sales, including plug-in hybrids, which doubled from a year ago.
Yale Zhang, head of Shanghai-based consultancy Automotive Foresight, also expects VW to reach its goal with a full-year volume of 150,000 to 200,000 ID vehicles.
"But that’s really nothing to write home about for VW China," he said. Zhang said the German automaker has five ID models in showrooms in China right now and may add another before year’s end, which in total would be doing volume that Tesla generates with just one model.
"No one at Volkswagen should be happy about that," Zhang said.
VW, the biggest foreign automaker by sales in China, said its overall China sales fell 21 percent in the first half of the year to 1.47 million units.
Wollenstein, however, predicted "tremendously high growth" in the second half for both VW and the overall industry thanks to policies spurring demand.
“The top priority now must be to restore consumer confidence and ensure stable production and supply chains,” Wollenstein said, adding that with deliveries improving since May, the carmaker’s catch-up plan has “fully kicked into gear.”
Overall car sales in the world’s biggest auto market plunged earlier this year as COVID lockdowns shuttered factories and showrooms and kept people isolated at home. Not a single car was sold in Shanghai in April. While some automakers such as Tesla and VW managed to keep production lines running using so-called closed loop systems, getting components into factories was a challenge.
“The semiconductor supply started to ease in June and if the COVID situation also continues to stabilize, we will be able to make up for our production delays in the coming month,” Wollenstein said.
There are still bottlenecks however with VW in China beholden to chip availability across the group. That’s causing shortages in some areas, including one particular car camera, Wollenstein said.
VW is also facing mounting pressure to address allegations that ethnic Uyghurs in China are suffering from coercive labor practices in the region. Chief Executive Herbert Diess last month vowed to visit carmaker’s Xinjiang plant as soon as Covid conditions allow and to keep investing heavily in China as its biggest market.
Wollenstein on Friday said that all the carmaker’s staff in Xinjiang are employed under direct labor contracts.
“We haven’t established the Xinjiang plant to please anybody,” Wollenstein said, noting it started about 10 years ago when “everybody believed in the strong ‘Go West’ trend in China.”
“We also got government subsidies to build the plant, but this is nothing different as if you would do it in Qingdao, or Tianjin, or now in Hefei or Changchun,” he said.
Reuters and Bloomberg contributed to this report.
