Volkswagen today said it aims to sell 1m electric or hybrid vehicles this year as the German car giant outlined plans to return to profitability through a cost-cutting plan.
Sales of electric vehicles grew sharply last year, but the company is now targeting a rapid expansion that would see its deliveries more than double in 2021.
“Our good performance in 2020, a year dominated by crisis, will give us momentum for accelerating our transformation,” chief executive Herbert Diess said.
Volkswagen also gave upbeat figures for its profit margin, which it said would likely end 2021 at the upper end of its five per cent to 6.5 per cent target.
The world’s second-largest carmaker is aiming for an operating margin of between seven and eight per cent by 2025.
Volkswagen said it would achieve this by reducing fixed costs by €2bn by 2023 compared with last year, as well as by reducing material costs by seven per cent over the same timeframe.
The company has also offered early or partial retirement to its older employees in an effort to reduce personnel costs.
Volkswagen’s German-listed shares jumped almost seven per cent to their highest level since 2015. The company now has a market capitalisation of just under €120bn.
But boss Diess today said the car maker, which also owns the Audi and Porsche brands, was worth €200bn. “Analysts, too, arrive at the conclusion that the sum of the parts has that value,” he told Reuters.
The comments come a day after VW unveiled plans to build half a dozen battery cell plants in Europe and expand infrastructure for charging electric vehicles globally as it looks to take on US rival Tesla.
Tesla only sells a fraction of the number of cars its German rival does, but has a market value of roughly $680bn.
Car makers are increasingly betting on electric vehicles amid a tightening of regulations on carbon emissions around the globe.
But the wider industry has been hit by a chip shortage, which Diess today said had hit VW’s car production by 100,000 vehicles.
The car boss said Volkswagen would secure future chip supply via direct agreements with semiconductor suppliers.