Elon Musk and Tesla still dominate the market, but traditional automakers are catching up with them quickly.
It’s not “shocking” to date a pop star, openly brag or claim to want to die on Mars, but the public realizes that Herbert Diess is starting to resemble Elon Musk in many ways.
Opening a press conference on March 15 with the theme “Power Day” modeled after Tesla’s “Battery Day”, the CEO of Volkswagen AG stated that there is only one way to quickly reduce emissions from vehicles. means of transport: use electrically powered products. Skeptics are certainly not surprised by this message, because it comes from an automaker that has been caught up in a scandalous emissions cheating scandal.
But Volkswagen has finally paid off after five years of efforts to create a standardized platform that has spawned dozens of electric vehicles. “Many in the industry have questioned our approach‘,” Diess said during a two-hour press conference that he leads from VW’s headquarters in the German city of Wolfsburg. “If today they are still absorbed in imitation, we are already reaping the rewards.”
Last year, VW became the No. 1 electric vehicle maker in Europe, where sales of battery-powered vehicles skyrocketed as carbon dioxide limits became stricter. Following the introduction of the ID.3 hatchback in 2020, the ID.4 crossover – the first global model based on VW’s electric platform – is starting to reach showrooms from Shanghai to Chicago. This year, VW plans to deliver 1 million plug-in hybrids and all-electric vehicles, and Diess aims to surpass Tesla in electric vehicle sales by 2026. Some analysts predict this will happen much sooner.
When multiple parties enter the race
In addition to choreographing events and ramping up Twitter hype, Diess has recently had another thing in common with Musk: VW’s stock price has been pushed to unimaginable levels. Sure, Tesla’s sky-high valuation means that Musk can afford to buy VW tomorrow if he wants to, but VW’s common stock has gained more than 80% of its value this year. Musk has long said he welcomes competition in the electric vehicle space and that Tesla’s mission is to promote the advent of sustainable energy. Looks like he got what he wanted.
The field of electric vehicles is increasingly transforming: from a stage to a braggart, it is now packed with competitors. While VW has as good a chance as anyone to share the lead with Tesla, what everyone is concerned about is how the rest of the competition will compete. General Motors CEO Mary Barra said her company’s stock price spiked in January when she announced she wanted to phase out gas- and diesel-powered cars by 2035. Many Chinese manufacturers China is rolling out low-cost electric vehicles, and Hyundai Motor is planning nearly two dozen models.
Renault SA surprised Europe last year with the Zoe, a battery-powered hatchback. In the US, Ford Motor’s Mustang Mach-E is hitting showrooms and Lucid Motors, a Tesla clone, backed by Amazon.com, is on track to raise $4.4 billion in funding with the desire to find a way to “copy” Musk’s success.
The race to produce electric vehicles is increasingly attracting many big players (Source: Bloomberg)
What Tesla has done for the auto industry is similar to what Netflix has done with the cable network. Netflix has removed the traditional way of doing things, creating simple operations to access movies like Breaking Bad and hundreds of other shows, thereby motivating users to cut contracts with Comcast. But just as Netflix is now seeing a growing challenge from its old rivals Walt Disney and HBO – the traditional automakers are starting to compete strongly with the upstart.
Although Disney is years behind Netflix, Disney’s service has been wildly successful with new shows like The Mandalorian, along with copyrighted classics like Pinocchio, Toy Story, and Mulan. Similarly, Diess won the hearts of investors by making the case that VW could exploit something Tesla hasn’t touched on yet: scale.
With dozens of brands filling every niche of the auto market — and sales last year were 9.3 million vehicles, compared with Tesla’s half a million — VW is uniquely positioned to pool its resources and bear the costs of developing new technologies. Next year, VW will have 27 models based on its standardized platform. “Our transformation will be fast“, Diess stated, “greater than anything the industry has seen in the last century“.
Like Musk, Diess is thriving on batteries and charging stations. By 2025, VW and its partners will have more than 35,000 public charging stations around the world. And in the legal agreement with the US and California, there is a clause that VW commits to spend $ 2 billion to promote the construction of charging infrastructure. In 2017, VW established a subsidiary called Electrify America, which now boasts the largest fast-charging network in the US.
Diess is also planning to build six battery plants in Europe, which BloombergNEF estimates will require an investment of nearly $18 billion. Improvements in battery design and manufacturing have put VW on track to be able to cut battery costs in half as early as 2025. That could make its electric vehicles cheaper than combustion cars. inside are similarly equipped.
Some rivals say it’s not prudent for VW to overinvest in electric cars because electric cars still have a small market share – about 3% of vehicles sold worldwide last year. Toyota, which narrowly overtook VW to become the world’s largest automaker in 2020, has long argued that hybrids are a more affordable middle ground. And BMW also takes advantage of the flexibility, building many of its models in different versions: petrol, hybrid, plug-in hybrid and electric. “We think the single-engine centralized strategy can be risky“, CEO Oliver Zipse told Bloomberg Television on March 17.
But Diess has no plans to stop. VW aims to have a single scalable system by 2025 to underpin all of its battery-powered cars — regardless of brand or segment — as it aims to sell 26 million cars in the next 10 years. Michael Dean, a Bloomberg Intelligence analyst who expects VW to take the global EV crown by 2023, said:They are confident that they can catch Tesla. Their foray into electrification is very serious“.
According to Bloomberg
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