Lower thirds:

00:03 Report by / Steven Beardsley
00:39 Oliver Blume / CEO Volkswagen Group
01:04 Michael Tyndall / HSBC Analyst
01:50 Oliver Blume / CEO Volkswagen Group
02:04 Tom Narayan / RBC Capital Markets Analyst

Script:

In Spain, a counter-offensive in the making.  
 
Martorell, just outside of Barcelona. A decades-old production hall for Volkswagen’s SEAT and Cupra brands. Now outfitted to build the company's newest electric vehicles. 
 
Volkswagen is producing four new battery-electric models for the European market – each around 25,000 euros – the most affordable EVs Volkswagen has yet offered. All using the same platform. 

In China it's working with partners to roll out 30 new vehicles by the end of next year, from battery EVs to hybrids and range-extenders.  

In both markets, the pressure from competitors is high. 

SOT - Oliver Blume - CEO Volkswagen Group
"We are quite happy with the progress we can see right now. Now we are looking for the future. We are entering the next step of transformation." 

Yet Volkswagen still has a problem: Demand is too low to make production at Martorell and elsewhere as economic as desired. The carmaker is finally approaching the buildout in EVs that it's long targeted -- but without the buyers. 

SOT - Michael Tyndall - HSBC Analyst
“If you are building a platform thinking we are going to do however many hundred thousand units on it, and market adoption is not quite what we thought, then we’re not going to get the scale benefit that we hoped for.” 

Volkswagen has capacity to build 12 million vehicles a year. A level of production it hasn't reached for quite some time -- and doesn't expect to need soon. 

High costs continue to weigh on its performance, meanwhile. Volkswagen is currently earning between 4 and 5 and a half cents profit for every euro of sales. It's aim by 2030 -- between 8 and 10 and cents.

It's cutting costs -- slashing 50,000 positions by 2030. It's shuttering assembly lines and leasing out unneeded industrial space. 

Oliver Blume / CEO Volkswagen Group
"Material costs play a role. But also our sales costs. We are focusing -- and overhead costs. That is teamwork in the end. But we have to do it, because we have to face the competition." 

Analysts say the bigger trends could still shift in Volkswagen's favor.

Tom Narayan / RBC Capital Markets Analyst
“I don’t think the issue is this is some permanent structural loss that EVs are in this permanent state of slowdown. It’s one of, we’re in this lull period. And I think VW is looking at it at a big picture and saying demand is going to come back.” 

But with more competitors than ever, Volkswagen's big picture could look somewhat smaller in the future.