BYD and Li Auto are the only profitable EV players in China. As pricing pressure continues, I expect that most of them will not survive. Volkswagen Group, on the other hand, is profitable with an expected 2024 net liquidity in the automotive division of more than 36 billion euros. So yeah, I think Volkswagen has a chance to recoup or maintain its current market share. It only needs to bring attractive models to the market. They say the Xpeng JV will bring new models to the market at a reduced time (30% less than before). The concept vehicles being developed with SAIC look great technology-wise. I still have to examine Xpeng’s and SAIC models in detail to be able to tell how the models they will develop with Volkswagen will look like.
In 2023, the proportionate operating result from China joint ventures was €2.6 billion euros, around 11.6% of the Group’s total (page 37). However, Porsche doesn’t sell through the joint ventures. In 2023, 25% of Porsche’s deliveries went to China (page 24). Based on this and operating profit of €6.3 billion, China contributed around €1.6 billion in 2023 to Porsche. That brings the total operating profit from China to around €4.2 billion, or 18.7% of the total.
I also don’t think Volkswagen has any room for failure, especially with regards to the upcoming models and the cost-cut measures.