Volkswagen Has A Giant Share Of China's Auto Market — But When It Comes To EVs, It Still Can't Match Up To Tesla

Volkswagen AG VWAGY all-electric vehicle deliveries in China more than doubled to 18,285 vehicles in the first half of the year but fell massively short of ace rival Tesla Inc’s TSLA nearly 145,181 deliveries so far this year.

What Happened: Volkswagen said its first-half delivery volumes in China account for 10.7% of the German automaker’s global electric vehicle sales and reiterated plans to deliver around one million electrified vehicles in 2021 including battery-powered as well as plug-in hybrid electric vehicles.

China is crucial to Volkswagen's success overall. The automaker sold 1.85 million vehicles in the country in the first half of 2021, making China its single largest market with a 37% share of total volumes. Volkswagen brands make up for 18% share of the China auto market, as per LMC Automative, reports the Wall Street Journal.

“In the third quarter, we expect a significant boost to BEV deliveries in China thanks to the expanded Volkswagen ID. model range” said Christian Dahlheim, head of group sales at Volkswagen.

Volkswagen’s global battery electric vehicle deliveries too more than doubled to 170,939 vehicles in the first half of 2021, compared with 64,462 units it sold a year ago.

See Also: Elon Musk Says Tesla To Open Supercharger Network To Other EVs Later This Year

Region-wise, the U.S. and China deliveries were almost neck-to-neck, with the former accounting for 10.8% of the global deliveries. Europe continued to account for the bulk of the deliveries representing 74.9% in the first half.

In June alone, Tesla delivered 28,138 electric vehicles in China, as per China Passenger Car Association.
Why It Matters: China has been proactively pushing the adoption of electric vehicles, offering subsidies and other incentives.

Volkswagen, which aims to overtake Tesla as the world's top EV maker by 2025, is in a tough battleground where it has to compete with the Elon Musk-led company and at least half a dozen homegrown electric vehicle makers. 

Despite Tesla’s recent woes in China, sales have not cooled off. Local Chinese rivals such as Nio Inc NIO, Xpeng Inc XPEV, Li Auto Inc LI, and BYD Co BYDDF also all give tough competition with their product offerings.

See Also: Tesla, Local Rivals Nio, Xpeng, Li Growing Together, Not Cutting Each Other's Market Share, Say Analysts

Competition is only going to increase as legacy automakers General Motors Co GM and Ford Motor Co F unveil new offerings soon. 

Price Action: VW shares closed 1.7% higher at $32.35 on Tuesday.

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Photo: Courtesy of Volkswagen