Volkswagen's trouble deepens as new figures surface

Volkswagen's trouble deepens as new figures surface

VW's 2025 Dream Seems out of Reach for Investors

Let's break down Volkswagen's current situation, as the gap between the automaker and its competitors is widening in some crucial areas.

The Volkswagen stock fell short of analysts' expectations, recording a 1.4% decrease in global deliveries in 2023 to about 4.8 million cars. Even though some regions, such as South America and North America, showed growth, overall, the downward trend in sales is evident.

German Leader, but Losing Ground to Tesla

Volkswagen has maintained its status as Germany's top auto seller, with a 19.1% market share. However, the story is different for electric vehicles (EVs), where VW has experienced a dip in sales and now seems far from capturing the market leadership by 2025 as initially planned. The company sold 383,100 electric vehicles in 2023, which is a drop compared to the previous year.

Struggling in China, the World's Largest Car Market

Volkswagen also encounters difficulties in China, the world's largest car market. The company made around 2.2 million deliveries in the People's Republic in 2023, marking an 8.3% decrease year-on-year. The China Passenger Car Association forecasts minimal expansion for the overall market by 2025. However, growth of approximately 20% is still predicted in the electric vehicle segment, creating fierce competition for Volkswagen.

What's Next for Volkswagen?

Some consolation for investors is that much of the negative impact on the stock may already be priced in. By Thursday afternoon, the VW stock was down only around 1% to 88.62 euros. To regain its footing, the company will need to capitalize on cost-cutting measures and meet commitments it has made to achieve long-term success.

Conflict of Interest Disclosure

The CEO and majority shareholder of the publisher Boersenmedien AG, Mr. Bernd Foertsch, has directly or indirectly acquired positions in the following financial instruments mentioned in the publication: Volkswagen Vz.

The managing editor-in-chief, Mr. Frank Poepsel, has directly or indirectly acquired positions in the following financial instruments mentioned in the publication: Volkswagen Vz.

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Volkswagen's Challenges in the EV Market

1. Decreasing Consumer Interest:Recent surveys indicate waning consumer interest in electric vehicles, driven by concerns such as high battery repair costs, elevated purchase prices, and anxiety over charging infrastructure and long-distance travel[1][3]. Only 16% of U.S. adults reported being “very likely” or “likely” to purchase a fully electric vehicle as their next car[1].
2. Adjusting Product and Platform Strategy:Volkswagen is rethinking its electric vehicle ambitions, notably delaying its all-new Scalable Systems Platform (SSP), which is intended to underpin future electric models. The company is also considering integrating range-extending gas engines to address market uncertainty and consumer reluctance[5].
3. Tariffs and Global Supply Chain Tensions:Tariffs and broader economic trends are impacting EV sales volumes, with fluctuations in monthly and yearly sales reported across major markets. Volkswagen, like other manufacturers, faces pressure from these macroeconomic factors[3][5].
4. Mixed Sales Performance in Key Markets:While Volkswagen leads the European EV market in terms of volume, the company experienced a decline in EV sales in the U.S. in April, contrasting with gains by other automakers like Tesla and GM[3]. This underscores the importance of adapting to regional demand and competition.

Volkswagen's Prospects in the EV Market

1. Leadership in Europe:Volkswagen tops the European EV market, with over 847,000 EVs sold in the first quarter of 2025, a 20% year-on-year increase. The Volkswagen ID.7, ID.3, and ID.4/ID.5 consistently rank among the best-selling EVs in Germany[2][4].
2. Increasing Market Share in Germany:EVs claimed a 28.8% share of the German market in April 2025, up from 18.4% the previous year. Volkswagen models dominate the top spots, indicating robust momentum in its home market[4].
3. Strategic Flexibility:By reconsidering its platform and powertrain strategy, Volkswagen is positioning itself to respond to shifts in consumer demand, ensuring it can offer both pure electric and hybrid solutions as needed[5].
4. Expansion of Affordable Models:The used EV market is growing, and Volkswagen stands to benefit as affordable electric models become more accessible, increasing adoption rates and diversifying its customer base[3].

Volkswagen in the China Market

1. Increasing Competition from Local Brands:Chinese manufacturers such as BYD and NIO have rapidly gained market share with affordable and technologically advanced EVs, pressuring Volkswagen to accelerate its local innovation and reduce costs.
2. Regulatory and Incentive Environment:China’s government continues to support EV adoption through subsidies and infrastructure development, but local brands are better positioned to capitalize on these incentives.
3. Strategic Partnerships and Local Production:Volkswagen is deepening partnerships with Chinese firms and investing in local production capabilities to remain competitive. The company is also focusing on developing models tailored specifically for Chinese consumers.

Investing in Volkswagen's stock necessitates a careful analysis considering the company's challenges in the EV market, such as decreasing consumer interest, adjusting product strategy, and tariff-related supply chain tensions. On the other hand, the company's prospects include leadership in Europe, increasing market share in Germany, strategic flexibility, and the expansion of affordable models. In the China market, Volkswagen faces growing competition from local brands and requires strategic partnerships and local production to stay competitive. The technology sector plays a crucial role in Volkswagen's EV strategy, particularly in terms of innovation and meet the demands of both European and Chinese consumers.

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