German tardiness (Part II of II)
- November 9, 2019
- Auto Extended Warranty, Extended Auto Warranty, Extended Car Warranty
- Posted by Michael Robinson
- Comments Off on German tardiness (Part II of II)
The VW Group also counts on Skoda, Audi, Porsche and Seat brands in its portfolio of cars. Don’t be surprised if you see the same EV platforms employed in VW cars rolled out to the previously mentioned manufacturers. If this occurs, analysts bullish on the VW Group are talking about 22 million EVs by 2028 being manufactured by the larger group. And of these – 11.6 million could come out of Chinese factories.
All of this sounds rosy for VW, but Tesla’s missed promises (manufacturing 500,000 plus cars by 2018) have placed doubts with other manufacturers. This year for example Musk plans to deliver 360,000 to a maximum of 400,000 cars, far below the 500,000 figure. High volume manufacturing is not easy, and Musk has tweeted the same. However, he remains optimistic with Tesla Chinese factory development in motion and looking to end June 30, 2020 with a 500,000 target. VW is betting big on China but is also converting two of their German plants (Zwickau and Hanover) into EV plants. Moreover, plants in Emden and Dresden (Germany), one in the Czech Republic and another in Chattanooga, Tennessee are all part of a $33 billion investment push for the lead up to 2023.
Tesla still holds the edge when it comes to range – 560 km on their long-range Model 3 compared to between 330 and 550 km by VW. Tesla employs a sophisticated algorithm to control how much electricity is injected into the motor, seat heaters, cooling system and infotainment center. This is something no other company counts on, but VW can indeed compete on economies of scale and price. The VW EV, the ID.3, is priced very affordably at $33,363 compared to the Model 3 – $50,000. Battery plants are being built in Poland and Germany with companies like LG and CATL advancing their positions. VW is also rumored to be entering a deal with Ford to license its MEB vehicle platform which if executed would yield an additional $10 billion in revenue over the coming years.
This is all a far cry from what any German company was doing in the electric sphere ten or even seven years ago. Nobody is quite sure why it took so long for the Germans to react. Perhaps it was the rap music analogy, but the country is a powerhouse on so many different levels, this one seemed to be a no-brainer. Something tells us however that German automotive dominance in EVs will not take long to conquer. Look for some familiar names soon on that annual hits chart.