The electric car market is struggling, and Volkswagen's sales slump is evident.

Last year, Volkswagen's delivery volume decreased, mainly due to weak demand for electric vehicles and intense competition in the key Chinese market. The German parent company of brands such as Audi, Eastman Kodak Company and Porsche delivered 9.03 million vehicles globally, a decrease of 2.3% from 2023. Sales of its all-electric vehicles decreased in Europe and the United States, with the most severe challenges faced in the Chinese market. Volkswagen has been heavily impacted by the turmoil in the automotive industry, facing fierce competition in the Chinese market from domestic manufacturers led by BYD Company Limited, as well as cuts to electric vehicle subsidies in Europe. CEO Oliver Blume has been working on cost savings, especially within the company's namesake brand. Negotiations between management and unions lasted for months before reaching agreements on widespread capacity reductions last year. To boost sales, Blume will seek new technical partnerships with Chinese company Xiaopeng Motors and US startup Rivian Automotive. However, threats of US tariffs, signs of weakness in the Chinese market, and high living costs across Europe may make the situation very difficult this year. In 2024, these issues have sparked a wave of profit warnings, including from Volkswagen, Mercedes-Benz Group AG, and BMW AG. Overall, this year has been a difficult one for the German automotive industry. Demand for the most expensive models in China has weakened, leading to a 3% decline in Mercedes-Benz sales. Due to component issues, BMW's sales have decreased by 4% and Porsche's by 3%, with the largest decline in China at 28%. Volkswagen's challenges are most evident in the Chinese market, where total sales last year dropped by 9.5% to 2.93 million vehicles. Volkswagen said on Tuesday that China "continues to be characterized by fierce price wars among more than 120 competitors," adding that its goal is to sell 4 million vehicles annually in the world's largest automotive market by 2030. In the United States, President-elect Donald Trump threatened tariffs, but Volkswagen has still not been able to offer any pickup trucks favored by local drivers. Despite a 6.4% growth in sales in North America last year, the delivery volume of its all-electric vehicles in the US dropped by about 30%. Demand for Porsche and Mercedes-Benz in the fourth quarter of last year saw a slight rebound, leading to expectations that 2024 could be a low point for struggling German automakers, with potential for improvement in the future. Volkswagen noted encouraging orders for electric vehicles in Western Europe, including demand for new models such as Volkswagen ID.7, Audi Q6 e-tron, and Porsche Macan.