Not “shocking” by dating a pop star, publicly boasting or declaring he wanted to die on Mars, but the public realized that Herbert Diess was starting to resemble Elon Musk in many ways.
Opening a March 15 press conference titled “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 Transportation: using electric products. Skeptics are certainly surprised by this message, because it comes from the car manufacturer who has been caught up in the scandal of gas emission fraud.
But in the end, Volkswagen got the payoff after five years of trying to create a standardized platform, producing dozens of electric cars. “Many industry insiders have questioned our approach“Diess said during the two-hour press conference he led from VW’s headquarters in the German city of Wolfsburg.”If they were still just engrossed in imitating today, we are reaping the rewards. “
Last year, VW became the No. 1 electric vehicle manufacturer in Europe, where battery-powered car sales skyrocketed as the carbon dioxide limit tighter. After the introduction of the ID.3 hatchback in 2020, the ID.4 crossover – the first global vehicle to be based on VW’s electric platform – is beginning to reach showrooms from Shanghai to Chicago. This year, VW plans to offer 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 participate in the race
In addition to staging clever events and promoting promotion on Twitter, Diess recently had another thing in common with Musk: VW’s stock price has been pushed to utopian levels. Sure, Tesla’s sky-high valuation means Musk can afford to buy VW tomorrow if he wants to, but VW’s common stock has risen more than 80% in value this year. Musk has long said that he welcomes competition in the electric vehicle sector and that Tesla’s mission is to promote the advent of sustainable energy. Looks like he got what he wanted.
The electric vehicle sector is changing more and more: from the stage to the bragging man, now full of competitors. While VW holds as good a chance as anyone else in sharing its leadership position with Tesla, what people are concerned about is the competitiveness of its remaining competitors. General Motors CEO Mary Barra said her company’s share price soared in January when she announced she wanted to phase out gas-powered cars and diesel engines by 2035. Many Chinese manufacturers Quoc is launching low-cost electric cars and Hyundai Motor is planning nearly two dozen models.
Renault SA surprised Europe last year with Zoe, a battery-powered hatchback. In the US, Ford Motor’s Mustang Mach-E is attacking showrooms and Lucid Motors, a “clone” of Tesla, backed by Amazon.com, is on track to raise $ 4.4 billion in funding. with the desire to find a way to “copy” the success of Musk.
The race to produce electric cars is attracting more and more big players (Source: Bloomberg)
What Tesla has done for the auto industry bears parallels to what Netflix has done with cable television networks. Netflix has removed the traditional approach, creating simple gestures to access movies like Breaking Bad and hundreds of other shows, thereby prompting users to cut their contracts with Comcast. But just as Netflix is now seeing a growing challenge from old rivals Walt Disney and HBO – traditional car makers are starting to compete vigorously with the emerging company.
Although Disney has been behind Netflix for many years, the Disney service has been hugely successful with new shows like The Mandalorian, along with the copyright storage of classics like Pinocchio, Toy Story and Mulan. Likewise, Diess has won investors’ hearts by making the case that VW can exploit something Tesla has yet to reach: scale.
With dozens of brands filling every corner of the auto market – and last year sales of 9.3 million, compared with Tesla’s half a million – VW is uniquely positioned to gather resources and bear the costs of developing new technologies. Next year, VW will have 27 models based on its standardized platform. “Our transition will be fast“Diess said,”bigger than anything the industry has seen in the past century“.
Like Musk, Diess is thriving in terms of batteries and charging stations. By 2025, VW and its partners will have more than 35,000 public charging stations around the world. And in a legal agreement with the US and California, there is a clause VW pledges to spend $ 2 billion to promote the construction of charging infrastructure. In 2017, VW set up a subsidiary called Electrify America, which now boasts the largest fast charging network in the US.
Diess is also planning to build six battery manufacturing plants in Europe, which BloombergNEF estimates will require an investment of nearly $ 18 billion. Improvements in battery design and manufacturing put VW on the right track to halve battery costs by early 2025. That could make its electric cars cheaper than incinerators. in similarly equipped.
Some rivals insist that VW’s overinvestment in electric cars is reckless because electric cars still have a tiny market share – about 3% of cars sold worldwide last year. Toyota, which almost overtook VW to become the world’s largest automaker by 2020, has long argued that hybrid cars are a more sensible middleman solution. And BMW also takes advantage of the flexibility, building many of its models in different versions: gasoline, hybrid, plug-in hybrid and electric. “We think the one-engine 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 they aim to sell 26 million units in the next 10 years. Michael Dean, an analyst with Bloomberg Intelligence who hopes VW will win the global EV crown by 2023, said: “They are confident they can catch up to Tesla. Their foray into electrification is very serious“.
According to Bloomberg
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