I tend to be averse to making predictions. I'm a reporter, first and foremost, and that means I hate being wrong. But if you want an example of how poorly predictions can age, just remember that not even five years ago, one big consulting firm predicted that Volkswagen would be the world's top electric carmaker by 2025—selling at least 1.4 million EVs globally—with Renault-Mitsubishi-Nissan in second place.
That turned out to be very wrong on multiple fronts. Last year, globally, Volkswagen managed about half that, 745,000 EVs worldwide, and even that was one hell of an accomplishment. As for Renault-Mitsubishi-Nissan, well... that one has its own issues.
But few people could've also predicted the turn that Tesla, and CEO Elon Musk, have taken as of late. And now it seems that the Volkswagen Group—the original "pivot to electric" company—is surging in some places because people want alternatives to Tesla. You really can't predict the future.
That kicks off this midweek edition of Critical Materials, our morning roundup of auto industry and technology news. Also on deck today: China's BYD takes off as the rest of the world faces a tariff crisis, and that situation is also forcing South Korea to throw its automakers a lifeline. Let's dig in.
30%: Volkswagen Group Doubles EV Sales In Europe As Tesla Stumbles
It's not my job to root for one car company over another, or to personally care whether any of them are profitable or not. But even I have to admit it's nice to see the VW Group score some EV wins after also becoming the poster company for how hard the software-driven electric transition really is.
Today, the automaker announced 2.13 million worldwide vehicle deliveries in the first quarter, which is a 1.4% increase after a brutal 2024. Interestingly, the conglomerate doubled its all-electric sales in Europe. "We increased our all-electric deliveries worldwide by around 60% in the first quarter," board member Marco Schubert said in a statement. "In Europe in particular, we were able to significantly expand our leading position in this segment with a doubling of deliveries. The share of all-electric models in our total volume in Western Europe also doubled to around 19%."
That's 113% EV growth in Europe, as well as 51% growth in the U.S. Worldwide, it's about 216,800 EVs in total. The biggest sales winners are the ID.4, ID.5, ID.3, and ID.7 from Volkswagen proper. The Audi Q4 E-Tron and the Škoda Enyaq are also in there. I still wish ID.7 would come stateside, but if it couldn't before tariffs, it's infinitely harder now
And Bloomberg reports that EV owners turning away from Tesla is a big factor in all of this:
Volkswagen and other EV makers appear to be benefiting from consumers’ aversion to Tesla after Musk became more involved in U.S. President Donald Trump’s administration and supported far-right political movements in Europe, such as Germany’s AfD party. Volkswagen’s EV deliveries soared 59% to 216,800 units, more than doubling in Europe and rising 51% in the U.S., two of Tesla’s key markets.
Musk's involvement in the so-called U.S. Department of Government Efficiency's federal slashing efforts is one thing, but the Europeans in particular are unhappy with his involvement in their own politics. The reaction seems to be a move away from Tesla to other brands. Tesla's sales in Europe have been down by double digits every month.
Granted, it's not all sunshine and roses for VW. Its sales in China continue to slide, down 7% in the first quarter. That decline has made the U.S. a more important market than ever, but with VW's heavy dependency on exports from Europe and Mexico—shipments of which are already halted—it is among those most vulnerable to tariffs. For now, whatever Tesla's losses are seem to be VW's gain.
60%: BYD Laughs At Our Tariffs, Prints More Money
One of President Donald Trump's arguments for his tariffs is that the rest of the world wants—needs, even—U.S. exports, including cars. They just aren't getting those cars because of the unfair trade deals set up to work against the Americans' favor.
China's BYD would like a word. It's quickly making inroads into Europe and has already claimed a lot of the global south with surging sales in Africa and Latin America. As the rest of the world's auto industry is thrown into chaos over tariffs, BYD seems positioned to pick up the slack. Reuters reports today that the company expects its net profit in the first quarter to be up somewhere between 86.0% and 119% compared to the same period last year.
Again, it's not wins everywhere. India, itself a giant car market, said it won't welcome BYD into the country as it courts Tesla instead. But as America puts the rest of the world's auto industry into a state of confusion, China again just keeps on moving forward. We may end up with more than a few regrets as a result.
90%: South Korea Hands Its Automakers A Lifeline Amid Trade War
Meanwhile, South Korea's largest automaker, the Hyundai Motor Group, is rapidly working to scale up its U.S. manufacturing base. But Korea is still a heavily export-dependent country. Tariffs on its cars are going to be extremely painful, even in the short term.
So as it's done before, the country's government is pledging a new wave of direct "emergency" support for its car companies. And they're all eyeing the rest of the world for expansion plans, too. Via Bloomberg:
South Korea unveiled a package of emergency funding worth 3 trillion won ($2 billion) for its automobile industry to soften the blow from President Donald Trump’s tariffs. The government will lower taxes on automobile purchases to 3.5 percent from the current 5 percent until June.
It will also raise electric-vehicle subsidies to 30 to 80 percent of price discounts from the current 20 to 40 percent and extend the program to the end of this year.
The government will designate self-driving technology as a national strategic technology with tax incentives. The government also said it would also actively support automakers’ efforts to expand export markets in the “Global South,” which refers to less developed countries in Africa, Latin America and Asia, where demand is growing.
We could well see similar moves by other countries soon.
100%: Who Wins Amid All The Tariffs?
Technically, nobody "wins" in a trade war that spikes the prices of all sorts of goods and throws the markets into turmoil. But some automakers are better positioned than others to survive this moment—or even take advantage of others' weaknesses.
Take the Volkswagen Group. It really needs U.S. sales to take off amid European stagnation and outright decline in China. Yet it heavily depends on Mexico and makes a relatively small number of cars at its Chattanooga, Tennessee plant. It's going to take a beating in the short term. (I actually think Tesla would've netted out fine here, but thanks to its CEO, it has other problems.)
Then you have the Chinese automakers. Tariff spikes on Chinese goods won't be positive for their economy, but they could use this situation to move into other markets and grow more quickly if other players are forced to stall out. And they have enough control to push their costs lower as needed.
So who do you see coming out of all of this better than the rest? Let us know what you think in the comments.
Contact the author: patrick.george@insideevs.com
