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Volkswagen is a German motor vehicle manufacturer established in 1937 by the German Labour Front. Known for the iconic Beetle, VW is headquartered in Wolfsburg. It is the leading brand of the Volkswagen Group, and one of the largest car makers worldwide. In this article, we will look at the latest news about the car manufacturer, so you have a good grasp of how Volkswagen is doing when trading CFDs on the popular German brand.
Volkswagen Recovers with EV Sales
The Volkswagen crossover is bouncing back, hitting 5,936 registrations in May. With demand recovering, the ID.4 is expected to do well. A top 5 position is possible for 2024, but due to the big competition, it seems unlikely that it would regain the bronze medals of 2022 and 2023. The reason for this is the hard competition from Tesla models as well as the Audi Q4 e-Tron, Skoda Enyaq, and Volvo EX30. The crossover’s May performance was the result of demand from the domestic market, with Germany having 1,339 registrations, followed by Norway (741 registrations) and Denmark (702 registrations).
Top Selling Electric Vehicles in Europe – May 2024
1. Tesla Model Y
2. Volvo EX30
3. Tesla Model 3
4. Audi Q4 e-Tron
5. VW ID.4
6. VW ID.3
The two Volkswagen Group models, both of them BEVs, are in the 5th and 6th spot. The 6th spot of the VW ID.3 recorded 5,683 sales, which is the best result for the hatchback since August.
Volkswagen has been one of the top 3 in Europe almost every year since 2015 (with the exception being 2019), it will do everything in its power to increase sales and reach the 3rd position. The only problem it has is competition from Volvo which is also going strong.
Top Auto Groups for Electric Vehicles in Europe
1. VW Group
2. Stellantis
3. BMW Group
4. Geely-Volvo
5. Tesla
Volkswagen Group enjoyed good performances across its brand lineup to stay at 20.1%. So, the German OEM is ahead of the competition.
Germany’s Volkswagen Explores Establishing Facility in Egypt
The German automotive giant is planning to enter a joint venture to establish a production facility in the East Port Said industrial zone. The news was reported by the company’s Chairperson and Managing Director in Africa, Martina Biene on 30 June.
The production facility will allow different original equipment manufacturers to work under the same facility. Biene explained: “It is a really interesting partnership because what Egypt and East Port Said are trying to build is something unique, and something we have not heard in the automotive industry so far.”
Volkswagen has already signed a joint agreement with the Suez Canal Economic Zone (SCZone), Egypt’s Sovereign Fund (TSFE), and the East Port Said Development Company (EPSDC) to run a feasibility study to work together on the facility.
On 12 November, the German automotive manufacturer signed an agreement with the three state entities to conduct a feasibility study on setting up an automotive zone in East Port Said. The study will cover how possible it is to create similar facilities, such as body shop, buildings, and a car assembly line.
Volkswagen and Rivian $5 billion partnership
The Volkswagen Group plans to invest up to $5 billion in Rivian, an electric vehicle startup and will begin with an initial $1 billion investment and a further $4 billion by 2026. The agreement includes plans for $1 billion each in 2025 and 2026, followed by $2 billion in 2026 about a joint venture to create electrical architecture and software technology. The first $1 billion from Volkswagen will be in the shape of a convertible note, which could be converted to Rivian shares on or after 1 December. The partnership will support Rivian’s journey to become cash flow-positive, Rivian CEO and founder RJ Scaringe said on Tuesday 26 June. As he noted, the funds will allow Rivian to increase the production of its smaller R2 SUVs at its plant in Normal, Illinois, starting in 2026, as well as the manufacturing of the midsize EV platform at a plant in Georgia.
Rivian CEO and founder RJ Scaringe said: “We believe the opportunity ahead is significant. This deal is possible because we’re focused on vertically integrating our network architecture, topology, V-CPUs, and associated software platforms. I’ve spoken about the importance of these platforms in the past, and how difficult it is to replicate them.”
Volkswagen is not the first legacy automaker to invest in the California-based company. When Rivian went public in 2021, Ford Motor was one of Rivian’s largest stakeholders, at around 12%, alongside Amazon. In 2023, Ford Motor left Rivian after withdrawing from a plan to codevelop EVs with Rivian.
Demand for Electric Vehicles has slowed down in recent years but Pietro Zollino, head of VW corporate communications, said the deal with Rivian does not mean their plans to build a $2 billion EV plant for the Scout Motors trucks and SUVs in South Carolina have changed.
Why is this investment good for Volkswagen?
Analysts and investors see the investment as a move to solve the company’s software problems. VW’s software division, Cariad which was established during the time when Herbert Diess was the former VW Group CEO, had gone overbudget and failed to meet its goals, which resulted in Diess resignation in September 2022.
Back in January, Volkswagen stated it remained on track to introduce 25 group-brand EV models in North America by 2030, although it admitted that growth in the segment would be quicker in other regions. They are currently 3% lower than earlier this year, which resulted in a decline in the company’s shares value.
Discussing the situation with VW, Mavka Capital’s Golomb said that it is still not a major contender in the large SUV and pickup truck market in the US. Moreover, it is not breaking through with its crossover electric SUV ID.4. However, that is where the partnership with Rivian gives the company flexibilities, he said.
Volkswagen said on Tuesday that Rivian software would also be utilised by Volkswagen Group’s EV off-road brand, Scout, which is mapping a manufacturing facility in South Carolina for constructing pickups and SUVs that would directly compete with Rivian. The plant is planned to start production in late 2026.
Cariad, VW’s mobility subsidiary has been in the red for quite some time now. Some components of those older structures were procured from suppliers, and that complicates the integration of all the intricate elements, according to analysts. Issues at the unit slowed down the progress of new car projects that include the Porsche e-Macan and Audi Q6 e-Tron.
Currently, Volkswagen has embarked on a new software architecture. However, the cars they produced utilising that particular technology will not be on the market until 2028. However, VW responded that Cariad will have a significant responsibility to pivot the scaling of software that’s applied across the brands.
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