The Volkswagen Group said high energy prices have hit Europe’s demand for electric vehicles in recent months, but US growth is helping offset the slowdown.
Thomas Schmall, CEO of VW’s components division, says EV sales in Europe are still growing but are “off track.”
The North American market “is picking up speed a bit faster than expected in the past few months” as a result of incentives like the U.S. Inflation Reduction Act, Schmoll said. Demand in Europe is recovering over the medium to long term.
Schmall, alongside VW Group CEO Oliver Blume, appeared at a media call on Tuesday to announce a joint venture on charging infrastructure in Italy with a subsidiary of the Enel Group.
VW and Enel X Way will each invest €100 million ($105 million) in Ewiva, aiming to build a high-power charging network of 3,000 stations by 2025.
Affordability of EVs remains a key issue as raw material and battery costs remain high and consumers experience high electricity bills and inflation.
Volkswagen is looking at alternative battery chemistries that may be less efficient but offer lower costs in the face of rising nickel and cobalt prices. According to Schmall, the replacement could hit the market as early as 2026.
“This means smaller batteries, because having a big battery in a small car is expensive,” says Schmall. “The average customer says he drives 40 kilometers per day, so why does he need a range of 500 kilometers?”
All-electric vehicles accounted for 6.8 shares of VW Group’s total sales in the third quarter, the automaker said in a statement on Oct. 28. Group sales of battery electric vehicles increased by 25% to 366,400 units. Due to supply constraints, the Group’s fully electric vehicle order bank in Western Europe stands at a high level of over 350,000 units.