Volkswagen to beef up hybrid offerings as EV shift stumbles

Volkswagen AG’s namesake brand plans to bolster its offering of plug-in hybrid cars in response to a slowdown in demand for fully electric vehicles. Expanding its portfolio of models with both a battery and an engine is among the VW brand’s top priorities, Chief Executive Officer Thomas Schäfer said Wednesday. The move is a shift from its previous strategy of focusing mainly on full EVs.

Customers “want plug-in hybrids now, including in China and the US," Schäfer said in an interview on the sidelines of an auto-industry conference in London.

Volkswagen has been tweaking its EV strategy after model delays and falling behind in China, where local brands dominate. Last year, the manufacturer scrapped plans to build a dedicated €2 billion ($2.2 billion) EV factory in Germany.

With EV growth slowing, carmakers are turning to familiar drivetrains to defend sales. Toyota Motor Corp. has been benefiting from a surge in global demand for hybrids. Mercedes-Benz Group AG earlier Wednesday said it will sell combustion-engine cars longer than expected amid disappointing EV sales.

VW’s latest hybrid technology — used in models such as the Passat and the Tiguan — already offers an electric range of over 100 km (62 miles), Schäfer said.

“But now you have to think further," he said. “How do we make this even more cost-effective? How do we get there? This is happening right now."