Chi­nese demand to help Volk­swa­gen

Aims to sell al­ter­na­tive fuel mod­els at price of con­ven­tional ve­hi­cles

Global Times - Weekend - - FRONT PAGE -

Volk­swa­gen’s (VW) core brand ex­pects to beat the com­pany’s stated tar­get of selling 1 mil­lion elec­tric cars by 2025, a se­nior man­ager said, cit­ing solid demand in China and Europe, as well as un­tapped po­ten­tial in the South­ern Hemi­sphere.

VW’s push into vol­ume pro­duc­tion of elec­tric cars comes as ri­val Tesla strug­gles to scale up man­u­fac­tur­ing of its Model 3, which is also aimed at the mass mar­ket.

Af­ter its emis­sions scan­dal broke in 2015, Europe’s largest au­tomaker by sales un­veiled an am­bi­tious plan to be­come a world leader in green trans­port and de­liver 1 mil­lion VW-brand elec­tric ve­hi­cles (EVs) a year by 2025, based on a plat­form called MEB.

Ef­forts by China, the world’s largest auto mar­ket, to tackle air pol­lu­tion have helped trig­ger a surge of in­vest­ment in the EV sec­tor, cut­ting bat­tery prices while rais­ing the Ger­man brand’s op­ti­mism on the ap­peal of the tech­nol­ogy.

“One could ar­gue that we will well ex­ceed the 1 mil­lion [tar­get] from the MEB,” Chris­tian Senger, head of elec­tric mo­bil­ity at the VW brand, said in an in­ter­view.

In April, Volk­swa­gen and its joint-ven­ture part­ners an­nounced that they will in­vest 15 bil­lion eu­ros ($18.3 bil­lion) in de­vel­op­ing new-en­ergy ve­hi­cles and self-driv­ing cars by 2020.

It plans to roll out 15 new car mod­els in China by 2020 and launch 40 new-en­ergy ve­hi­cle mod­els for the Chi­nese mar­ket by the end of 2025.

The com­pany will start lo­cal pro­duc­tion of bat­tery-elec­tric cars in at least six fac­to­ries in China by 2021, said Her­bert Diess, the new CEO of VW.

Other Ger­man car­mak­ers are also in­vest­ing heav­ily in EVs.

For ex­am­ple, BMW said re­cently that it would start mass pro­duc­ing elec­tric cars in 2020, while Daim­ler’s Mercedes-Benz Cars plans to launch more than 10 EV mod­els by 2022.

Senger said lat­est signs that demand could beat ex­pec­ta­tions come from na­tional sales or­ga­ni­za­tions such as Moeller Mo­bil­ity Group in Scan­di­navia, which dis­trib­utes VW cars across mar­kets and re­gions.

“In the cy­cle plan where we again and again un­der­take for­ward plan­ning for up to 15 years, we see that the mar­kets even want more [elec­tric] cars than we have ear­marked.” Be­sides Europe,

China and the US, VW sees ad­di­tional po­ten­tial in other re­gions in­clud­ing South Amer­ica that are not re­flected in its sales tar­gets, Senger said.

He also said VW needs to gauge whether its bat­tery pro­duc­tion ca­pac­ity would al­low it to serve demand in the South­ern Hemi­sphere at all.

Mass demand

To stoke mass demand, VW is aim­ing to sell its EVs at the price of con­ven­tional com­bus­tion en­gine cars, draw­ing on MEB syn­er­gies and fall­ing bat­tery costs, Senger said.

De­signed to un- der­pin nearly 30 bat­tery­driven mod­els from four group brands, rang­ing from the Golf-size I.D. hatch­back to the Vizzion sedan, the MEB plat­form will al­low the VW group to cut pro­duc­tion costs due to economies of scale.

VW group has a goal of selling 3 mil­lion EVs by 2025, in­clud­ing mod­els from pre­mium brands Audi and Porsche, and Czech di­vi­sion Skoda.

Wait­ing times for the E-Golf have grown to more than 12 months af­ter state and in­dus­try-backed in­cen­tives led the model’s price to drop by about one-third to about 25,000 eu­ros, ac­cord­ing to VW.

Not ev­ery­one shares the com­pany’s con­fi­dence.

VW’s works coun­cil has re­peat­edly warned against EV “hype” and said greater progress on set­ting up charg­ing sta­tions will be key to meet­ing VW’s sales goals.

In Ger­many, two-thirds of 1,800 re­spon­dents to a March sur­vey by ad­vi­sory firm Deloitte said they would opt to buy a com­bus­tion en­gine car as their next ve­hi­cle, with 23 per­cent fa­vor­ing hy­brids and only 7 per­cent an all-elec­tric model.

“EVs are only com­pet­i­tive with large sub­si­dies and there are still ques­tion marks over driv­ing range and charg­ing net­works,” said an an­a­lyst who de­clined to be iden­ti­fied. But Senger was un­fazed. “We are look­ing at growth rates here that we have in no other prod­uct,” he said. Demand is al­ways volatile, “but the in­di­ca­tors we have show that it [beat­ing the 1 mil­lion goal] can work.”

Photo: IC

Volk­swa­gen I.D. Vizzion elec­tric car is on dis­play dur­ing Auto China 2018 mo­tor show in Beijing on April 25.

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