Volkswagen Under Pressure Between Combustion Engines and EVs: Global Deliveries Fall 9 Percent – Europe and South America Grow Against the Trend
Wolfsburg – Volkswagen Group delivered 6.01 million vehicles worldwide in the first nine months of 2026, 9 percent fewer than in the same period last year. Deliveries in China fell 30.2 percent and in North America 4 percent, while group deliveries rose 1.7 percent in Europe and 4.3 percent in South America.
Declining Markets: China Sales Down 30 Percent – US Under Pressure from Incentive Policy and Tariffs
The global sales decline has intensified over the course of the year. In the third quarter of 2026, Volkswagen Group deliveries fell 14.3 percent to around 1.89 million vehicles. China had the largest impact: deliveries there dropped 30.2 percent to 1.38 million vehicles in the first nine months, and 38.5 percent in the third quarter alone. The absolute decline in China of around 595,000 vehicles is almost equal to the group’s total global decline of around 593,000 vehicles.
Volkswagen points to the shrinking overall Chinese market, particularly for combustion-engine vehicles. Deliveries of battery electric vehicles (BEVs) in China fell 42.5 percent to 48,900 vehicles in the first nine months, and 30.1 percent in the third quarter. Volkswagen aims to counter the trend with locally developed models. By contrast, for all electrified vehicles, including BEVs, plug-in hybrids and vehicles with range extenders, the group reported growth of around 30 percent in the third quarter compared with the same quarter last year.
North America also declined. Deliveries fell 4 percent to 680,200 vehicles, including a 7.8 percent drop in the US. The decline was particularly sharp for all-electric vehicles: in the US, BEV deliveries fell 78.4 percent to 14,900 vehicles in the first nine months, and 86.4 percent in the third quarter. Volkswagen cites the end of government purchase incentives, along with import tariffs, as key burdens. The year-on-year comparison must also take into account that some electric vehicle purchases were brought forward ahead of the expiry of the US tax credit at the end of September 2025.
Deliveries also declined in the rest of the Asia-Pacific region, down 9.1 percent to 212,500 vehicles, and in the Middle East/Africa region, down 5.7 percent to 281,000 vehicles.
Growth Markets: Europe and South America Expand – Electric Vehicles Drive Demand in Europe
In Europe, Volkswagen increased deliveries across all drive types by 1.7 percent to 2.96 million vehicles. Business with all-electric vehicles grew particularly strongly: BEV deliveries rose 12.1 percent to 586,100 vehicles, and 19.6 percent in the third quarter. The share of electric vehicles in the group’s European deliveries increased from 18 to 20 percent.
Volkswagen cites high fuel prices and a wider range of entry-level electric models as reasons for the rising demand. In Germany, a new government subsidy also applies retroactively to new registrations since January 2026. Applications have been possible since May. Grants of up to EUR 6,000 are available for battery electric vehicles, depending on income and family size, and of up to EUR 4,500 for eligible plug-in hybrids. The share of Volkswagen’s sales growth attributable to the subsidy has not been quantified.
According to the group, almost 150,000 orders have already been placed for the new Electric Urban Car Family, comprising the VW ID. Polo, ID. Cross, Škoda Epiq and CUPRA Raval. In the third quarter, European BEV order intake rose by more than 60 percent compared with the same quarter last year. The BEV order backlog has doubled since the end of 2025. According to the group, around 40 percent of all open vehicle orders in Europe are now for all-electric models.
In South America, deliveries rose 4.3 percent to 502,500 vehicles, including a 12.3 percent increase in Brazil. However, the gains in Europe and South America were not enough to offset the declines in other regions. Globally, BEV deliveries also fell 5.4 percent to 678,700 vehicles.
IWR: Technological Change and Policy Frameworks Fragment Automotive Markets
Volkswagen’s performance illustrates a fundamental challenge for internationally operating automakers. “The technical transition from the combustion engine to electric mobility is progressing at different speeds in the world’s major regions. At the same time, government support programmes, import tariffs and industrial policy strategies are shaping competitive conditions. This is leading to a growing fragmentation of international automotive markets,” said Dr. Norbert Allnoch, Managing Director of IWR.
For Volkswagen, this market fragmentation means the group must manage its existing combustion-engine business and the transition to electric mobility in parallel. Added to this is the high pace of market change: support programmes are introduced or ended, trade conditions shift and new drive technologies gain importance. At the same time, development cycles are shortening. Manufacturers must therefore adapt their model, development and production strategies at ever shorter intervals to increasingly different regional requirements. This increases complexity and development effort for the international automotive industry.
Source: IWR Online, 13 Oct 2026
