Volkswagen AG projects deliveries will rise as chip supplies grow and the automaker’s order books remain full.

The German automaker projects its revenue will climb as much as 15%, with operating returns reaching as high as 8.5% this year. The margin will match 2022 results, even if supply improvements lead to lower vehicle prices.  

“We are in an industry heavily influenced by the under-supply of semiconductors in the last two years,” Chief Financial Officer Arno Antlitz said on an earnings call. “We expect under-supply to ease, but that’s true for every competitor—so we expect not only a better supply situation but also increased competition.”

VW is working through several hurdles as it pivots its focus to electric cars, which comprised 7% of group deliveries last year.

CEO Oliver Blume faces pressure to revamp the company’s software push and defend the automaker’s position in China, its largest market.

“We have a slowdown in the economy and expect demand growth to moderate,” Antlitz said. “We have to maintain our pricing discipline and be stronger on our cost side in order to compensate for headwinds and higher material costs.”

VW reported it remains in “constructive talks” about building a battery plant in North America. But no final decision has been made, according to Antlitz. The battery facility is part of the company’s push to increase its U.S. market share and become less reliant on China. 

“We have the possibility to enlarge our global footprint even faster in the U.S. with the Inflation Reduction Act,” he said. “It’s very good timing for us, as we want to grow in the U.S.”