The German auto giant Volkswagen AG expects to increase the sale of its ID battery electric vehicles in China by two times this year, the company said, and added that it wants to perform even better next year. it however also cautioned that a global scarcity of semiconductors could stymie the automaker’s expectations on performance.

The ID series, which Volkswagen manufactures in China in collaboration with SAIC Motor and FAW Group, is the cornerstone of the company’s EV ambitions in the world’s largest auto market.

Last year, the German automaker sold 70,625 ID electric vehicles in China, falling short of its target of 80,000 to 100,000 vehicles, as it production was hampered by regional Covid-19 outbreaks as well as a shortage of auto chips.

Despite the anticipated constraints, it would still be possible for Volkswagen to double its original plan even though that goal “is not currently secured by the semiconductor supplies that we currently see,” said the German company’s China chief Stephan Wollenstein at a briefing in Beijing.

He however also added that he was “pretty positive that we will see a doubling of actual sales.”

According to Wollenstein, the Volkswagen Group, which includes its brand of Audi, Lamborghini, and Porsche in addition to its own brand, sold 3.3 million cars in China last year, which was a 14 per cent decrease compared to the previous year.

For the current year, the company hopes to increase that figure by 15 per cent or around 500,000 units, though he noted that this would be contingent on chip supply.

Due to a shortage of chips, which are used in everything from brake sensors to power steering to entertainment systems, automakers around the world have had to halt or suspend production, driving up the cost of both new and used vehicles despite strong customer demand.

While China’s EV market is booming, most Western automakers have lagged behind their Chinese competitors when it comes to building appealing smart cars.

The Chinese electric vehicles market is currently dominated by a multitude of Chinese brands, with BYD and Wuling – a local favourite which is also a part of the GM group – leading the way. Tesla is the only foreign brand among the top ten of the electric vehicle sellers in China, and ranks third on the list.  

“You don’t see Volkswagen. Players like Volkswagen, GM (GM.N) and Toyota (7203.T) have fallen far behind in China’s smart EV race,” said Bill Russo, head of consultancy Automobility in Shanghai.

According to Russo, the share of battery electric cars or plug-in electric hybrids in all of the passenger cars purchased in China last year was at 15 per cent ntil November 2021. In November, electric car sales made up about 21 per cent of total passenger car sales in China.

(Adapted from EconomicTimes.com)