The path to an electric future is not without its challenges, as evidenced by the woes afflicting Volkswagen and Volvo.
Volkswagen shares are down 16 per cent in 2024, and the company faces industrial unrest after suggesting it may close factories in Germany for the first time in history.
One reason cited by analysts for Volkswagen’s weak profitability is its investment in electric vehicles, with Bernstein’s Stephen Reitman saying some EV plants “aren’t producing at the levels expected and costs are out of whack”. EV sales in Germany have fallen by a fifth this year. Increased competition from Chinese brands such as BYD is also putting pressure on Volkswagen.
Meanwhile, Volvo has abandoned its goal of having a fully electric line-up by the end of the decade. It expects electrified cars, including hybrids, to account for 50-60 per cent of sales in 2025.
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Previously, Volvo aimed for at least half of 2025 sales to be fully electric, with the rest hybrids. For investors, the transition to electric cars is proving a bumpy ride.
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