Herbert Diess, the CEO of Volkswagen Group, says his company is “basically sold out on electric vehicles in Europe and in the United States” for all of this year, according to The Verge. That means that anyone hoping to buy an EV from VW, Audi, Porsche, or any of the other brands within the Volkswagen Group may have to wait until 2023 as the company tries to navigate the chip shortage, production issues from pandemic-related shutdowns in China, or disruptions caused by Vladimir Putin’s desire to project an image of himself as the quintessential Alpha male by murdering as many Ukrainian citizens as possible before he is arrested and put on trial for crimes against humanity.
According to a report in the Financial Times (paywall), VW expects its backlog of orders to keep growing as supply chain issues make it impossible to fill all the orders for electric cars. Note that Volkswagen sold just under 100,000 electric cars in the first quarter of 2022. In comparison, Tesla sold around 310,000 electric cars in the same period.
According to Ars Technica, Diess said the company has an order backlog in Western Europe of 300,000 electric cars. “We have very high order books and … order intake on electric vehicles. That accounts for all of our models — from ID.3, ID.4, the Audi models — [all] are extremely well received in the markets. Škoda models are also very well received in Europe. We are basically sold out on electric vehicles in Europe and in the United States. And in China, it’s really picking up.”
In an interview with The Verge a few months ago, Diess said the company is trying to grow its presence in America and that any increase in sales in the US market will “mostly come from EVs.” He also said supply chain constraints were likely to continue throughout 2022.
Recently, the company indicated it is considering building a second electric car assembly plant in the US and probably a battery cell factory as well. It is expected both will be close to its existing production facility in Chattanooga, Tennessee.
New Volkswagen EV Investment In Spain
Volkswagen Group is also making plans to expand EV production outside of America. This week, it announced it will raise its investment in electric car manufacturing in Spain from €7 billion to €10 billion, provided it receives funding from Spain’s Strategic Project for Economic Recovery and Transformation. If so, it will use the money to build a battery factory in Sagunt near Valencia and reconfigure its existing manufacturing facilities in Martorell and Pamplona to produce electric cars. It will also fund the development of a comprehensive supplier network in Spain.
Construction of the battery factory with an annual production capacity of 40 gigawatt-hours is scheduled to begin in the first quarter of 2023, according to the current announcement. Production is scheduled to start in 2026, assuming the funds from the Spanish government are forthcoming.
While in Spain, Diess also announced an expansion of Volkswagen’s partnership with the Spanish energy supplier Iberdrola. In the future, they will cooperate on the expansion of EV charging networks in the country and Iberdrola will invest around £500 million to build a large solar park near the Sagunt battery plant to supply renewable energy to the factory.
Manufacturers of every description are struggling with supply chain issues today for a variety of reason. It is less than ideal for the supply of electric cars to be constrained at a time when demand is finally starting to grow. Scaling up production is difficult in the best of times. In today’s world, the problems are exponentially greater. Volkswagen appears undaunted by the challenges and is looking beyond today to a brighter tomorrow.
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