Volkswagen is reaping the first fruits of its “Accelerate” strategy

In 2021, Volkswagen delivered more electrified vehicles than ever worldwide with more than 369,000 units, or +73% compared to a year earlier.

Even though only 4.9 million Volkswagen vehicles were delivered in 2021, 8% less year-on-year, the company’s turnover nevertheless increased by 7% to 76.1 billion euros. Same trend for operating profit before exceptional items, which increased by 2 billion euros to 2.5 billion euros.

Satisfactory results for Volkswagen. One year after the launch of its “Accelerate” strategy, which aims to transform the company’s technology, the German brand has taken important steps in all key sectors: electro-mobility, digitalization and new business models. At the same time, the company improved its efficiency in a difficult competitive environment, recording a significant increase in revenue, margin and operating profit despite a significant decline in unit sales.

“2021 has been an extraordinary year. Today, we are much more profitable, more resilient to crises and more efficient than we were a year ago,” says Ralf Brandstatter, Chairman of the Management Board of Volkswagen Passenger Cars. And to add: “In 2022, we will continue on the path of transformation while improving our resilience. However, it is not possible at this time to predict the evolution of the war in Ukraine and its impact on supply chains and the global economy. But we have succeeded, in 2021, in giving ourselves a solid foundation that will allow us to master this crisis”.

In a tough competitive environment, 4.9 million vehicles were delivered in 2021, 8% less than the previous year (5.3 million in 2020). Turnover nevertheless increased by 7% to reach 76.1 billion euros (71.1 billion euros in 2020). Same trend for operating profit before exceptional items, which increased by 2 billion euros to 2.5 billion euros. The 2021 operating margin before exceptional items reached 3.3% (0.6% in 2020), within the targeted range (between 3% and 4%).

The strict policy of controlling expenses has made it possible to exceed the target set for general expenses, with in particular a drop of more than 1 billion euros in fixed costs compared to the result for 2019 (before the crisis). At the same time, Volkswagen continued to invest in the major themes for the future. Nearly one in two euros invested or spent on research and development was devoted to electro-mobility. By 2026, the company will invest 18 billion euros in electro-mobility, hybridization and digitalization.

Accelerated electro-mobility

With the “Accelerate” strategy, launched last year, Volkswagen is not content to strengthen its competitiveness. The company is also working to accelerate the deployment of electro-mobility and digitalization.

In 2021, the company delivered more electrified vehicles than ever worldwide with more than 369,000 units (+73%), including nearly 106,000 plug-in hybrids (+33%) and 263,000 100% electric vehicles (+97%) . The German brand has thus doubled its deliveries of 100% electric vehicles compared to the previous year. Three new electric models were launched in 2021 (the ID.4, the ID.5 and the ID.6). The year 2022 has already seen the launch of the ID. Buzz a few weeks ago. Pre-orders will begin in May and the delivery of the first vehicles is scheduled for the fall.

In response to the rapid growth in demand, production capacities are systematically increased. After the conversion of the Zwickau factory into a dedicated production facility for electric vehicles, three other factories (Emden, Hannover and Chattanooga (USA)) will start producing electric vehicles in 2022.

Perspectives 2022

Volkswagen plans to significantly increase deliveries of all-electric vehicles this year. The improvement in the semiconductor situation, which is expected for the second half of 2022 at the latest, should help the company achieve this goal. In addition, the brand expects an increase in operating profit, turnover and operating margin. “We confirm our target of 6% operating margin in 2023. We will take further steps in 2022 to prepare for it,” notes Alexander Seitz, Volkswagen Chief Financial Officer. It should be noted that these forecasts depend, however, on the evolution of the war in Ukraine and in particular on its impact on the Group’s supply chains and on the global economy in general.

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