The CEO of German automaker Volkswagen sought to allay fears about electric car sales and semiconductor shortages, saying that delivery periods for EVs will shorten as the year goes.

“The outlook is very good, we have [a] very good order intake in Asia,” Herbert Diess told CNBC.

In recent years, supply chain restrictions, notably those connected to semiconductors, have proven to be a substantial concern for automakers.

“We’re trying to keep delivery times short,” Diess said, “but we have a lead time of a year or so currently, so we are ramping up production … five assembly plants are coming into production now.”

During afternoon trading in London, Volkswagen shares rose 5%. The stock price on the Frankfurt exchange is down more than 28% year to date.

“We will see a ramp-up in the second half of the year to really be able to reduce delivery times for our EVs,” he added. “There’s high demand in Europe and also in the United States.”

Diess highlighted that semiconductors were still a bottleneck, but that this was likely to change shortly. “We will see some relief in the next weeks,” he said.

Diess’ remarks came on the same day that his company broke ground on a cell facility in Salzgitter, Germany, and founded PowerCo, a battery company. According to a release, PowerCo would be “responsible for the Volkswagen Group’s global battery activities.”

It went on to say that PowerCo would “spend more than €20 billion [$20.4 billion] alongside partners in the development of the business area, generating annual sales in excess of €20 billion and employing up to 20,000 people in Europe alone” between now and 2030.

VW claims that by 2030, electric vehicles will account for at least 70 per cent of its European revenue. Its goal in China and North America is to generate at least 50 per cent of revenue from EVs.

VW unveiled plans earlier this year to relaunch the legendary Scout brand as a fully-electric pick-up and “rugged” SUV, with prototypes set to be revealed in 2023 and manufacturing set to begin in 2026.

The company is also focusing on vehicle development, such as the totally electric ID Buzz, which is inspired by the T1 Microbus or “hippie” van.

(Adapted from CNBC.com)