Volkswagen Capitalizes on Tesla Weakness With EV Sales Jump

(Bloomberg) -- Volkswagen AG’s global deliveries rose in the first quarter, lifted by a surge in demand for its electric vehicles as customers turned away from Elon Musk’s Tesla Inc. 

Global sales climbed 1.4% to 2.13 million units, Europe’s biggest carmaker said Wednesday. Growth in Europe and the Americas offset Volkswagen’s ongoing decline in China, where deliveries fell 7.1% in the three months through March.

Volkswagen and other EV makers appear to be benefiting from consumers’ aversion to Tesla after Musk became more involved in US 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 US, two of Tesla’s key markets. 

It’s unclear whether Volkswagen will be able to sustain those gains going forward, after Trump’s auto tariffs kicked in last week. The German carmaker’s Audi and Porsche brands are poised to be hit hard, as European exports comprise the bulk of their US sales.

Meanwhile, Volkswagen and other European carmakers haven’t seen a recovery in China, the world’s biggest EV market, where local brands led by BYD Co. are dominating. Volkswagen’s EV deliveries slumped 37% there in the first quarter. 

The company’s shares were down less than 1% at 12:08 p.m. in Frankfurt. The stock has declined more than 30% over the past year.

Volkswagen has used rebates to boost EV sales in European markets. After dropping the price on its compact ID.3 hatchback helped sales late last year, the VW brand offered and extended a €3,570 ($3,945) discount on all electric models in Germany until the end of March.

(Updates with shares in sixth paragraph.)

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