Business figures: VW wants to catch up in 2023 - plans for new small electric cars

After the production and delivery backlog in 2022, the core brand of Volkswagen wants to catch up this year and hand over more cars to customers again.

Business figures: VW wants to catch up in 2023 - plans for new small electric cars

After the production and delivery backlog in 2022, the core brand of Volkswagen wants to catch up this year and hand over more cars to customers again. A significant increase in deliveries is being targeted, said CFO Patrik Andreas Mayer - including for e-cars. Recently there had been further difficulties in purchasing electronics, steel also became more expensive. "We are cautiously optimistic that the supply situation will stabilize over the course of the year," said the manager.

In the evening, VW showed a study of the planned small car in the electric ID series in Hamburg. The ID.2 should be ready by 2026 at the latest, will be produced in Spain, is roughly the size of a polo and should cost less than 25,000 euros in the basic version. Brand boss Thomas Schäfer said that the draft indicates in terms of design and technology "where Volkswagen is headed overall": "We are rebuilding the company quickly and fundamentally." Climate protectors have long been demanding that not only larger vehicles be equipped with alternative drives.

"We also have to take care of vehicles under 20,000 euros"

According to Schäfer, the "next big challenge" is an even smaller electric car: "We also have to take care of vehicles under 20,000 euros." There was criticism, for example, because VW is probably phasing out the electric version of the up in the mini segment.

So far, the Wolfsburg-based company has tended to focus on medium-sized vehicles, SUVs or sedans for the new E series - the entry-level model was the ID.3, which falls into the compact class and is comparable to the Golf. According to Schäfer, the aim is to spread e-mobility further.

Board member for development Kai Grünitz pointed to a revised version of the current electric platform MEB ("MEB Entry"), which will later go into series production in the ID.2. In this way, standardization and cost advantages should also be possible in the manufacture of small models.

VW continues to expect a "very challenging environment".

Mayer emphasized that the main division of the group must continue to pay attention to its costs. In addition, the environment in 2023 is likely to remain “very challenging in terms of supply, raw material and energy prices and the geopolitical situation”. Depreciation on the business in Russia burdened the brand result in 2022 with 500 million euros.

The Wolfsburg-based company sees the return before the inclusion of special factors at over four percent this year. From a turnover of 100 euros, around 4 euros would remain. Some other car manufacturers and also other VW Group subsidiaries are far more profitable - however, the core brand takes on many development tasks, for example.

The share of pure electric vehicles in VW passenger cars in Europe should be at least 80 percent by 2030, and ten new electric models should come by 2026. The ID.2 will be one of them - the concept will initially be known as "ID.2all". This year, among other things, the ID.7 electric sedan will follow. A large part of the investments in 2022 went towards the start-up of the ID.4 at the Emden and Chattanooga plants.

Competition with China: "The pressure is increasing"

Schäfer said of the growing rivalry with Chinese suppliers: "The competition keeps us on our toes, the pressure is increasing." But that's normal in the car business. VW is countering this with greater local vertical integration: "We are doing more in China for China."

In North America, the brand wants to achieve an e-car share of at least five percent by the end of the decade. Together with the expenses for networking technology, the investments are expected to reach five billion euros by 2027. At the same time, several modern combustion models are to be introduced, also in South America. VW justifies this with regionally different demand structures. That is why no general data is given on the phase-out of classic petrol and diesel engines, which provokes criticism from climate protectors.

Earn more money, sell fewer vehicles

From an economic point of view, the past year was successful for the VW core brand. Profits from ongoing business rose - excluding special effects - by 22.5 percent to 2.65 billion euros. Changes in sales and depressed costs played a role, it said. The return increased slightly by 0.4 points to 3.6 percent.

However, with around 4.6 million vehicles, VW brought significantly fewer cars to customers (minus 6.8 percent). There are now over 660,000 orders in Europe.

Sales of the main VW division climbed by 8.7 percent to 73.8 billion euros in 2022. This was not least due to the higher car prices. These had picked up as a result of general inflation, but also because of the tight supply on the new and used car markets. In this context, Volkswagen spoke of “improved price enforcement”. In addition, the scope of sales aids has decreased, and the usual discounts have decreased for many dealers.

Schäfer called the controversial e-fuels for combustion engines a "useful addition", but they are not a substitute for electric drives. He is critical of the EU's plans for tightened rules on permitted emissions of nitrogen oxides (Euro 7), which require expensive new technology: "The technology that is now required to be used on the last few meters (of the combustion engine) is suboptimal. "