Nothing is going well at Volkswagen: sales of electric vehicles are falling in Europe and Porsche is throwing itself into the arms of Google


Camille Coirault

November 1, 2023 at 11:27 a.m.

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Porsche Panamera 4S E-Hybrid © Camille Pinet

The VAG group must face complex economic realities © Camille Pinet

The giant Volkswagen is not in the best shape, particularly when it comes to its sales of electric vehicles in Europe. Its Porsche subsidiary, for its part, is turning to Google for the infotainment of its future models.

Almost a year ago, the situation was completely different for the German group; its electric vehicles were a great success and their sales exceeded forecasts. With a rather diverse range, from the ID.Buzz van to the ID.4 SUV, the electrification of their fleet was off to a pretty good start. The sound of the bell is a little different today. EV sales are falling considerably in Europe and Porsche’s strategic turnaround regarding the abandonment of the group’s in-house software marks a turning point for the firm.

Orders in free fall in Europe

The decrease in vehicle orders is rather alarming, at least on European soil. In fact, these have fallen by 50% compared to last year. Certainly, global sales of EVs increased by 45% over the same period (531,500 units over the first nine months of 2023), but Europe still remains Volkswagen’s most important market.

Add to this that the share of electric vehicles sold has also decreased. While it stood at 9% in the third quarter, it fell to 7.9% in September. Of all these sales, the overwhelming majority took place in Europe, with more than 341,000 EV models sold on the continent. However, orders in the USA and China are doing well and continue to increase.

Volkswagen therefore had to slightly revise its strategy to adapt to the realities on the ground. To cope with this drop in demand and also address their logistical problems in supply chains, market share forecasts for EVs have been revised downwards. While the group was counting on 11%, these will be capped between 8 and 10%.

Volkswagen (Dresden Manufaktur)

A slowdown in orders in Europe which is starting to weigh heavily

Porsche eyes Google

In parallel with this slowdown, Porsche announced that its future models will now integrate Google applications for their infotainment systems. A turnaround that can be explicitly attributed to the numerous software difficulties inherent in the software developed for the group by the Cariad company. The brand had already mentioned this strategic choice in the past without making this choice official, but it seems to be materializing.

A decision which also comes as Volkswagen announces a vast procedure to cut jobs at Cariad. Around 2,000 employees will soon have to pack their bags to leave the company, which will further slow down the development of the new software architecture developed for VAG. Even if Porsche has not commented on the future vehicles affected by the change, the first ones equipped with the “Google Built-in” suite will arrive in the middle of the decade. This will not, however, prevent the compatibility of vehicles produced in the future with Apple CarPlay or Android Auto.

Volkswagen, which dreamed of a peaceful electric future, now finds itself at a crossroads and will have to adapt quickly. The automobile industry has always been a competitive sector, but new arrivals (Tesla, BYD for example) and the complexity of production chains are intensifying this observation. The field has been greatly disrupted in less than ten years and historic manufacturers like Volkswagen must review their strategies to avoid losing face.

Sources: The Verge, Electrek



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