Volkswagen Group warned on Tuesday its e-mobility ramp up could be slowed down by the war in Ukraine, Kallanish reports.

BEV sales accounted for 2.5% of the group’s total sales globally early last year, rising to 5.1% after 453,000 BEVs were sold that year. The group was No. 1 BEV seller in Europe and No. 2 in the US in 2021. In China, another major EV market, sales rose over four-fold to 93,000 units.

The plan for 2022 is for BEV share to rise to 7-8%, roughly doubling sales volume. However, ceo Herbert Diess told the group’s annual press conference in Wolfsburg that “the war has put our existing outlook into question.”

The company says it’s not yet possible to assess the specific effects of the latest developments in the Russia-Ukraine conflict on the Volkswagen Group’s business, nor the impact it will have on the global economy and growth in the industry in fiscal year 2022.

“Under normal circumstances, we would have any reason to look optimistically into 2022,” says Diess, noting the semiconductor supply crunch is easing along with the pandemic restrictions.

Yet, the ceo acknowledges that the war is already impacting raw materials and supply chains, which will likely increase car prices. Ukraine is a major supplier of wiring harnesses for Volkswagen. If alternative supplies aren’t secured in 3-4 weeks, the carmaker may be forced to revise its outlook.

Diess reveals VW is relocating wiring harness production from Ukraine to North Africa and Eastern Europe. It’s shifting car production to China and the Americas in response to supply chain challenges and sanctions in Russia, where it halted car manufacturing plants.

“Volkswagen has proven its resilience over the past years and will manage this crisis, too,” Diess adds. “We will keep focus on implementation of our NEW AUTO strategy, which will enable us for an emission-free, autonomous future of mobility.”