Volkswagen EV profit margins will match combustion engines sooner than expected – CEO


Volkswagen CEO Herbert Diess looks on during his visit to Volkswagen’s electric car factory in Zwickau, Germany June 23, 2021. REUTERS/Matthias Rietschel/Files

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BERLIN, May 12 (Reuters) – Volkswagen (VOWG_p.DE) expects its electric vehicle business to be as profitable as its fossil-fuel cars sooner than expected, chief executive Herbert Diess said on Thursday.

Volkswagen previously planned to match its combustion engine vehicle profit margins with electric vehicle sales in two to three years, but the automaker was in a strong financial position to do so sooner, Diess said, despite an environment difficult economy.

“We expect the electric mobility business to be as profitable as the combustion engine business sooner than expected,” Diess said, speaking alongside the rest of the board at the annual meeting of directors. shareholders of the automaker.

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“Thanks to good crisis management, we are financially strong and have strengthened our resilience.”

Diess aims for Volkswagen to overtake Tesla (TSLA.O) and become the world’s leading electric carmaker by 2025, building on its larger product offering spanning luxury and premium cars and volume marks.

Volkswagen delivered some 452,000 battery electric vehicles globally last year and aims to have half of its global production fully electric by 2030. It plans to build 800,000 fully electric cars globally this year and 1.3 million in 2023, he announced Thursday.

Prices may need to rise further this year amid rising raw material costs, said purchasing chief Murat Aksel.

Diess also said he thinks the timing is right for an initial public offering (IPO) from sports car maker Porsche, which is slated for the fourth quarter of this year.

The final decision on whether Porsche will enter Formula 1 has yet to be made, said sports car maker chief Oliver Blume.

Volkswagen said in April that it and the Porsche and Audi brands were open to entry into the international racing class, but Diess said last week that there were divisions on the board, but that the brands ultimately made the case for the move. Read more

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Reporting by Victoria Waldersee, editing by Rachel More and Emelia Sithole-Matarise

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