Volkswagen which has been on it’s way to transform into an electric vehicle (EV) leader has hit a major milestone in its electrification which is the production of its 1 millionth electric car at the Zwickau plant in Germany. We see this achievement in the roll out of the ID.3 GTX which is a key model in VW’s electric vehicle push.
Also read: VW ID. Buzz LWB Priced at IDR 1.495 Billion at IIMS 2025
Financial Challenges Amid EV Growth
While the sale of the 1 millionth electric car is noteworthy, VW also has a dire financial crisis on its hands. Although electric car sales boomed, increased manufacturing costs of producing electric vehicles hit profitability for the company.
During the first quarter of 2025, Volkswagen’s European electric vehicle sales doubled year-on-year. As a result, the company saw its profits falling despite the boosted sales. Out of every five cars sold, one was an electric vehicle as VW’s earnings dropped to mere 4%.
VW’s Chief Financial Officer, Arno Antlitz, said that the decline in profits is because of the growing proportion of electric cars in their overall sales.
Also read: VW Kombi Electric Receives 300 Orders in Indonesia
Plans to Introduce Affordable EVs
As a response to the issues at hand, VW has announced that it will put forth a range of more affordable electric car options. The ID.2 which is to go for around 21,000 euros will hit the market in 2026. This compact car along with SUV versions and also from Cupra (Raval) and Skoda (Epiq) will use a more economic version of the MEB platform which is front wheel drive.
European-Made Electric Vehicles
The ID.2 will be produced in Spain. It is expected to be the first European-made electric vehicle that achieves profits similar to internal combustion engine vehicles.
Volkswagen Cars in Indonesia
Also read: Why Hyundai Recall the Ioniq 5, Ioniq 6, and Genesis G80 Electric Cars in Indonesia?
Impact on Volkswagen’s Financial Performance
The shift to electric cars has had a huge effect on Volkswagen‘s financials. Pre-tax profit for the company dropped 40% to £2.61 billion in the first quarter of 2025, even as total vehicle deliveries rose by 1.4%.
