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Volkswagen eyes US electric vehicle market as Ukraine battles disrupt production

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Volkswagen eyes US electric vehicle market as Ukraine battles disrupt production

Officials said Volkswagen is shifting its focus to North America, as the repercussions of Russia’s attack on Ukraine cause more supply chain headaches for the company in Europe.

Since the start of the war last month, several Volkswagen Group brands, including Porsche and Volkswagen, have been forced to suspend production at their plants due to supply disruptions, especially the wiring systems needed to operate the vehicles.

In response, Volkswagen was “shifting car production to regions such as China and the US” to help offset disruptions in Europe and fill a backlog of orders, the company’s chief executive Herbert Diess said on Tuesday.

The semiconductor shortage that hit the industry last year contributed to a 6.3 percent drop in sales at Europe’s biggest carmaker. but The company made more than 20 billion euros ($22 billion) in profit before taxes in 2021, nearly double the year before, thanks to a focus on building more profitable high-end vehicles and reducing expenses.

This year, the company will prioritize growing in North America, particularly the United States, where the 2015 diesel fraud scandal destroyed Volkswagen’s reputation. Recently, however, the company’s SUVs, including electric models, have proved popular among American drivers, officials said.

“Our business is dependent on improvements in the North American market,” Volkswagen brand chief executive Ralf Brandstetter said on Wednesday.

Tesla, the most popular maker of electric cars in the United States, remains the strongest competition for Volkswagen, although General Motors and Ford Motor both have popular electric models. Last week, the company unveiled ID.Buzz, an electric version of the Volkswagen Bus that it hopes will rejuvenate American imaginations in an era of sustainability and #vanlife.

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Volkswagen is hoping to wind down its hugely successful Porsche division in the last three months of the year, which could give it more financial flexibility in an uncertain environment.

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