Volkswagen stock dipped Tuesday as the company warned that Russia's war in Ukraine is adding to supply headaches from the auto chip shortage and clouding its 2022 outlook, including a critical shift to electric vehicles.
Volkswagen's warning comes after the German auto giant disclosed Friday that sales of battery electric vehicles (BEVs) almost doubled to 452,900 in 2021. But that fell short of its goal for half a million and fell well short of the nearly 1 million electric cars that Tesla sold last year. The Wolfsburg-based auto giant has an avowed mission to snatch Tesla's crown as the leader in electric mobility.
Management on Tuesday cited a lack of cable harnesses from Ukraine, which has already forced the company to halt production of the key ID.3 and ID.4 electric vehicles, among others.
"Volkswagen has proved its resilience over the past years and will manage this crisis, too," CEO Herbert Diess said at a press conference in Wolfsburg.
"The war in Ukraine has put our existing outlook into question," Diess added, amplifying on a warning Friday of the risk to its business from the war and bottlenecks in the supply chain. Some 380 companies have reportedly withdrawn from Russia due to the war, but others continue to operate there. Russia is a key supplier of nickel, widely used in EV batteries.
Amid turmoil in Europe, Volkswagen is making China — where it enjoys 16% market share and where EV sales jumped more than fourfold in 2021 — a bigger priority.
In 2022, the company expects to expand deliveries by 5%-10% and revenue by 8%-13%. It sees the supply of semiconductors improving in the second half of the year.
Rising raw-material costs will drive up prices for both electric and internal combustion engine vehicles, management said Tuesday. It warned that commodity volatility could persist until 2026.
Volkswagen Stock
Shares fell a fraction to 22.90 on the stock market today. Volkswagen stock remains below its 21-, 50- and 200-day moving averages after tumbling in the past year. Also on Tuesday, Tesla rallied 3.5% and Ford rose 1%.
VW stock spiked last March, hitting its highest level since 2009, on a bold shift to electric vehicles. The company launched the ID.4, the first with the ID.3 in a new generation of VW electric cars, and a rival to the Tesla Model Y as well as the Ford Mustang Mach-E crossover.
On Friday, Volkswagen posted a 46% decline in Q4 earnings per share on a 13% drop in revenue. Analysts were expecting earnings to tumble 56% and sales to fall 10%, according to FactSet.
Amid semiconductor shortages, Volkswagen sold around 600,000 fewer vehicles in 2021 vs. 2020. It sold 2.4 million fewer vehicles vs. 2019.
The German auto giant is making a massive shift to electric vehicles. By 2025, it aims to outpace Tesla as the world's EV sales leader.
On Monday, Volkswagen announced an expanded EV partnership with Ford in Europe.
