Volkswagen's pre-results release on Friday showed sales growth will slow this year due to falling demand for electric vehicles and intensifying competition, causing the company's shares to fall by as much as more than 7% in late trading on the German stock market.

According to the pre-release of results, Volkswagen's total revenue in 2023 will be 322 billion euros ($348 billion). Volkswagen said the new products will help Volkswagen grow revenue by 5% this year, which is down from 15% revenue growth last year.

This news caused Volkswagen's stock price to fall by up to 7.2%, and then narrowed the decline by 4.33% to 119.68 euros. Volkswagen's stock price has fallen 6.7% in the past year.

Analysts believe that automakers have been using the backlog of demand after the industry's long-term supply chain problems to offset growing financial challenges. High living and borrowing costs are expected to affect consumption this year. "Despite the gloomy economic outlook and fierce competition, we are confident about 2024," Volkswagen Chief Financial Officer Arno Antlitz said in a statement.

Meanwhile, Volkswagen is pressing ahead with a massive cost-savings program for its namesake brand to boost profit margins and catch up with rivals like Stellantis. The effort has taken on added urgency as EV growth slows and competition comes from cheaper Chinese models, other European automakers and Tesla Inc.

Volkswagen said on Friday it would cut its five-year rolling spending plan by 10 billion euros, to a total of 170 billion euros, as the peak spending period for gasoline-powered models and electric vehicles winds down.

According to the pre-release of results, Volkswagen’s fourth-quarter revenue reached 87.1 billion euros, with an operating profit margin of 7%. Adjusted operating profit was essentially flat at €22.6 billion, taking into account the negative impact from commodity hedging totaling €3.2 billion. In addition, Volkswagen increased the dividend payout to ordinary and preferred shareholders by 0.30 euros per share, bringing the dividend payout ratio to 28%, which fell short of the company's previous target of 30%.