Volkswagen CEO Blames Sales Slump on Lack of EV Subsidies

Volkswagen Admits Electric Cars Need Subsidies to Take Off

Thomas Schäfer, Volkswagen’s CEO, has defended electric mobility as the company’s future but attributed the drop in sales to a lack of subsidies and high electricity costs. The paradox is clear: a business presented as irreversible depends on public money to survive. Amidst setbacks in industrial plans and doubts about the commercial viability of electric vehicles, this statement has peine the debate on the true cost of the energy transition.

What Exactly Did the Volkswagen CEO Say?

Thomas Schäfer, Volkswagen’s CEO, defended electric mobility as the future and blamed declining sales on the absence of subsidies and high electricity prices. This claim, antiestéticatured in an article starring the executive himself, raises an uncomfortable question: if the future of automobiles needs public aid to get started, what kind of future is it? This is no minor issue in a sector that has invested billions in a technology that still cannot sell itself.

The reaction was immediate. Some argue the problem isn’t the technology, but the business model: a car that is expensive, has limited range, and requires long charging times at specific points. The most optimistic calculation assumes prices will drop with scale; the pessimistic scenario suggests demand has dried up after the initial wave of enthusiastic buyers.

The Subsidy Argument: Is Oil Also Subsidized?

The discussion quickly shifted to an uncomfortable comparison. Against the idea that electric cars can’t compete without aid, came the counterargument that all vital energy sources for a modern state receive some form of subsidy. The rebuttal is strong: in Spain, petroleum-derived fuels bear VAT and the Special Tax on Hydrocarbons, which account for around 40% of the final price. There is no subsidy, only tax burden.

This dispute is not trivial. If oil is taxed and electricity subsidized, the comparison of real costs changes completely. And if electric cars need direct aid to match the price of thermal engines, the question is how long this artificial balance can be maintained without taxpayers footing the bill.

Sales Drop and the End of Aid

The underlying data shows a sales decline that the CEO himself attributes to the lack of subsidies. In other words, the market shrinks when the stimulus disappears. The sequence is well-known: first come the aids, then the early adopters, and when the tap closes, registrations plummet. Some conclude that electric cars have not reached the commercial maturity they were expected to have.

In parallel, European manufacturers face double pressure. On one hand, Western politicians have set expiration dates for combustion engines, forcing investment in electric vehicles regardless. On the other, emission regulations make remaining thermal cars more expensive, reducing maneuvering room. The result is a sector investing at a loss in a technology that hasn’t taken off.

The Shadow of China and the Shift to Hybrids

China’s rise has changed the rules. Asian manufacturers dominate the battery supply chain and have achieved production scales Europe cannot match. Some analyses suggest Chinese electric cars will arrive in Europe with unbeatable prices, leaving local manufacturers in a delicate position. The response from some groups has been to rethink their strategy and bet again on hybrids as a technological bridge.

Toyota, which never fully abandoned the combustion engine, now appears as the manufacturer who was right not to rush. Renault has also maintained a bet on hybridization that some consider more realistic. Meanwhile, Volkswagen and other European groups face the possibility of becoming the Nokia of the automotive industry: leaders of an era that has passed.

The Real Cost for the Buyer

Beyond industrial strategy, individual buyers face a simple equation. An electric car with enough range for long trips comfortably exceeds €40,000. Charging infrastructure on intercity roads remains insufficient. And full recharge time, even in the best cases, is measured in hours. For many drivers, the balance doesn’t add up.

Anecdotes circulate among users themselves: those who have lived with an electric vehicle in their circle describe an experience full of compromises. It is not ideological rejection, but practical. Today, the electric car worsens what most people had with a thermal engine.

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The energy transition was sold as inevitable. However, sales data paints a different picture: without subsidies, electric cars don’t take off. And with them, taxpayers pay the bill for a technology that hasn’t yet proven it can fly alone. How much longer can this narrative be sustained?