Volkswagen Group said surging energy prices have hurt electric-car demand in Europe in recent months, though growth in the U.S. is helping offset the slowdown.
EV sales in Europe are still rising but have “gone off track,” said Thomas Schmall, CEO of VW’s components division.
The North American market is “speeding a little bit faster than we expected in the last months” as a result of incentives like the Inflation Reduction Act in the US, Schmall said. Demand in Europe is set to recover in the mid- to long-term.
Schmall appeared alongside VW Group CEO Oliver Blume during a media call on Tuesday announcing a joint venture on charging infrastructure in Italy with a subsidiary of Enel Group.
VW and Enel X Way will each invest €100 million ($105 million) in Ewiva, which aims to build a high-power charging network of 3,000 stations by 2025.
EV affordability remains a key question as raw material and battery costs stay high, and consumers experience high electricity prices and inflation.
VW is looking into alternative battery chemistries that may offer less efficiency but lower cost in the face of rising prices for nickel and cobalt. Alternatives could come to market as soon as 2026, Schmall said.
“It means smaller batteries, because big batteries in small cars are high cost,” Schmall said. “An average customer is driving 40 kilometers per day, so why do you need a 500 kilometer range?”
All-electric vehicles reached a 6.8 share of VW Group's total deliveries in the third quarter, the automaker said in a statement on Oct. 28. Group sales of battery-electric cars rose 25 percent to 366,400. Due to supply constraints, the group’s order bank for full-electric cars in Western Europe is at a high level of over 350,000 vehicles.