VW charging ahead on EVs with existing China factories

FRANKFURT: Volkswagen AG is ramping up production of electric cars to about 1 million vehicles by end of 2022, according to manufacturing plans seen by reporters, enabling the German carmaker to leapfrog Tesla Inc and making China the key battleground.

Volkswagen is readying two Chinese factories to build electric cars next year. The Chinese plants will have a production capacity of 600,000 vehicles, according to Volkswagen’s plans, which have not been previously reported — revealing VW’s ability to industrialise production faster than other pioneers in the electric vehicle market.

Tesla is still trying to reach its goal of making more than 500,000 cars a year by building a new factory in Shanghai, China, while VW can rely on an established workforce in two of its plants in Anting and Foshun to build zeroemission cars.

The scale and speed of VW’s electrification push marks a shift in favour of established manufacturers that can use existing factories and profit from combustionengined SUVs to scale up faster than startups.

‘‘Making cars is hard. The move to electric vehicles will be expensive, but will probably be led by traditional manufacturers,’’ Max Warburton, an analyst at Bernstein Research, said.

VW is leveraging its infrastructure of suppliers, factories and workers, long a handicap to profitability, more aggressively than rivals, including Tesla, which were all quicker to sell a customdesigned electric car.

Rather than adjusting production gradually, and using multipowertrain platforms, Volkswagen is making a massive bet on a dedicated electric vehicle architecture, known as MEB, in the hope of increasing economies of scale sufficiently to push down the price of electric cars to about ¤20,000 ($NZ34,866).

The Wolfsburg, Germanybased carmaker is retooling eight plants across the globe by 2022 to specialise in manufacturing electric cars, and license its electric MEB platform to rivals, senior VW executives said, putting it on track to become the world’s largest maker of zeroemission vehicles.

Tesla has emerged as a serious competitor with a credible car, its Model 3, Volkswagen CEO Herbert Diess said last week.

To fund its own electrification shift, the German carmaker aims to increase sales of VW SUVs, with combustion engines, to 40% of overall sales by 2020, up from 23% in 2018. — Reuters