The annual sales figures reported by Europe’s market leader on Friday underscore the huge challenge faced by global automakers as they pour tens of billions of dollars into electric cars and related technologies.
Carmakers around the world regard the demise of the internal combustion engine as only a matter of time, and many have set ambitious targets for sales of electrics and hybrids. Yet they are starting from a very small base.
The Volkswagen group, which includes Audi, Porsche and Skoda, sold just 40,000 electric cars last year, or 0.4% of its total deliveries. The figure rises to just 100,000, or 0.9%, when plug-in hybrids are included.
“It invested very heavily in diesel, with disastrous consequences,” he said, referring to the collapse in diesel sales that followed Volkswagen’s emissions scandal.
The first model built under its new program, the ID, will begin rolling off the assembly lines in 2022. Diess said the car will have a range of up to 550 km (340 miles) and cost the equivalent of its current diesel Golf.
Audi is leading the charge for Volkswagen.
The brand wants to offer 12 electric vehicles by 2025, and for electrified models to make up a third of global sales that year. The Audi e-tron and the e-tron Sportback will debut later in 2019.
They have to keep making money on traditional cars in order to fund their spending on new technologies. Still, more could be done.
“They all need to step it up,” he said of investment in cleaner vehicles.
The race to full electrification is likely to be decided in China, a major destination for investment that is already home to the world’s largest market for electric vehicles.
Building electric cars in China makes sense because that’s where most customers are. It also puts assembly plants closer to the supply chain for batteries, which account for about 40% of the value of electric cars.
Volkswagen announced last year it would pump $12 billion into making electric vehicles in the world’s number two economy. There’s little time to waste.
“If European carmakers doesn’t transform quickly enough, they will be wiped out,” said Bailey.
Daniel Shane and Ivana Kottasová contributed reporting.