Volkswagen sold 209,100 electric vehicles in the quarter. The operating loss was $6.6 billion.
Volkswagen Group concluded the third quarter and admitted outright that electric vehicle sales are not saving its profits. Globally, customers purchased 209,100 electric cars, 19.6% more than the previous year. Despite this, the group recorded an operating loss of $6.6 billion, the largest since Dieselgate in 2015.
Electric cars earn less than gasoline cars
Arno Antlitz, the group’s CFO and COO, was direct: “The market success of our electric cars is putting additional pressure on our profits, as we currently earn less from them than from gasoline cars.” He added that after nine months, the operating profitability before one-time items was 3.8%. In his view, this is too little to continue investing heavily in the future.
On paper, an electric car is a simpler machine and should be cheaper to produce. Yet for now, it costs a fortune even during development and construction. Costs will drop as batteries become cheaper and production scales up. Tesla and some Chinese brands show that it’s possible to make a profit on EVs. Traditional manufacturers, including VW, still can’t get their finances in order. However, with a growing market, they still need to keep pushing hard.
Electric cars are just part of the problem
Low margins aren’t the only reason for the poor results. According to InsideEVs, the biggest issue is the rapidly shrinking Chinese market, followed closely by high tariffs in the U.S. Add to this the write-down of Porsche’s shares. One-time expenses in the quarter amounted to nearly 9 billion dollars.
Antlitz talks about the need for quick action: “We can’t afford to waste time and must act quickly and decisively.”
There is also a thread that won’t escape attentive readers. The revelation of low margins on EVs coincides with VW’s push to ease EU CO2 limits. This might not be a coincidence. The argument that “electric vehicles are killing us” works well in talks with Brussels.
For buyers in Poland, this doesn’t mean anything immediate, but it’s worth keeping in mind with every promise of cheaper ID models. A manufacturer that loses money on each electric vehicle won’t sell them below cost for long.
Until batteries and scale reduce costs, every additional electric vehicle sold improves VW’s statistics more than its bottom line.
Source: InsideEVs
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