Volkswagen CEO says EV outlook is very good

Identifier. Buzz is photographed at the factory in Hannover, Germany on June 16, 2022. Supply chain restrictions, including those related to semiconductors, have recently become a major concern for automakers.

Ole Spata | Photo Alliance | Getty Images

CEO of the German automotive giant Volkswagen sought to allay concerns about EV sales and semiconductor shipments on Thursday, predicting that EV delivery times will shrink throughout the year.

“Prospects are very good, we have [a] very good order volume in Asia,” CNBC’s Herbert Diess Annette Weisbach said on Thursday.

Supply chain restrictions, including those related to semiconductors, have recently proven to be a major problem for automakers.

“We are trying to shorten delivery times,” Diess said, “but we currently have a lead time of about a year, so we are ramping up production…five assembly plants are now coming online.”

Volkswagen shares rose 5% during afternoon trading in London. The price of Frankfurt-listed shares has fallen by more than 28% since the beginning of the year.

“In the second half of the year, we will see a ramp up in production to really reduce the delivery time of our electric vehicles,” he added. “Strong demand in Europe and also in the United States.”

Semiconductors, Diess noted, are still a bottleneck, but said that is likely to change soon. “We will see relief in the coming weeks,” he said.

Diss’s comments came the same day that his company began building a battery factory in Salzgitter, Germany, and launched a battery company called PowerCo. The statement said that PowerCo will be “responsible for the global battery business of the Volkswagen Group.”

He added that between 2030 and 2030, PowerCo “is investing more than 20 billion euros”. [$20.4 billion] together with business development partners to generate more than 20 billion euros in annual sales and employ up to 20,000 people in Europe alone.”

By 2030, VW wants at least 70% of its revenue in Europe to come from electric vehicles. In China and North America, its target is at least 50% of EV revenue.

Earlier this year VW announced plans to relaunch iconic Scout brand as an all-electric pickup truck and a “robust” SUV, with prototypes due in 2023 and production slated to begin in 2026.

The company also concentrates on the development of vehicles. such as the all-electric ID Buzz, which is inspired by the T1 minibus or “hippie” van.

Learn more about electric vehicles from CNBC Pro