Strong demand for electric and premium vehicles boosted Volkswagen’s first quarter profit as the company continued to rebound from the pandemic.
Europe’s largest carmaker said in a statement on Thursday that it delivered 2.4 million vehicles between January and March — a 21.2% increase on the same period last year when the coronavirus was raging in China, the group’s single largest market.
“A key driver of this increase in volume was China,” Volkswagen said. Sales in the country surged 61.4% over the prior period.
Increased sales, including of more expensive vehicles from Audi and Porsche, lifted revenue to €62.4 billion ($75.2 billion) — a 13% increase on the same period last year and 4% more than in 2019. Profit before tax jumped to €4.5 billion ($5.4 billion) from €700 million ($843.5 million) in the prior period.
“We started the year with great momentum and are on a strong operational course,” said Volkswagen CEO Herbert Diess. “Our e-offensive continues to gain momentum and we have significantly expanded it with attractive new models.”
Volkswagen wants to dethrone Tesla as the king of electric cars and is spending billions of dollars to do so. The company said on Thursday that it delivered 59,900 battery electric vehicles in the first quarter, a 78% increase over the previous year. Sales of plug-in hybrids increased 178% to 73,400.
In March, the company unveiled a massive expansion of battery production in order to secure supply and drive down production costs. UBS analysts said in a recent report that Volkswagen could match Tesla’s sales as early as next year and go on to sell 300,000 more battery electric vehicles than Tesla in 2025.
Volkswagen’s stock is up 45% this year.
The company has raised its forecast for operating profit this year, despite a global shortage of semiconductors which it expects to have a more significant impact in the second quarter.