Volkswagen expects to turn a profit from electric cars by 2024
ELECTRIC cars will be profitable within “two or three years”, according to Volkswagen’s boss, while Mercedesbenz plans to spend more than €40bn (£34bn) to electrify its range.
Herbert Diess, chief executive of the Audi, Seat, Skoda and Porsche owner, made the prediction at VW’S annual meeting yesterday. Although the Ger- man company has never revealed the profitability of its electric models, experts believe the investment required to develop zero-emission cars means they are unlikely to yet break even.
“We assume that our margins in e-mobility and internal combustion engine business will be at the same level in two to three years,” he said.
“By 2030, the global electric vehicle market will be on par with [internal combustion] sales. Electric cars will then be much cheaper than vehicles with a [conventional engine].”
VW – which battles with Toyota for the title of the world’s biggest carmaker – has pledged more than £30bn for electric vehicles and related technology as it rushes to catch up with rivals in the wake of the 2015 “dieselgate” scandal.
The market for petrol and diesel cars will contract by a fifth over the coming decade, Mr Diess said. VW will cut costs by up to 7pc within two years by either switching engine plants to make electric drivetrains or closing them.
VW has introduced a swathe of new e-vehicles such as the ID3 hatchback and ID4 SUV, and now claims to be the biggest player in the European sector. It sold 171,000 all-electric vehicles in the first half of the year to give it a 26pc market share in Europe.
VW’S total global sales in the first six months of the year rose 27.9pc to 5m vehicles. Signalling the importance of the switch to electric for VW’S strategy, Mr Diess called electric vehicles “the only way we can significantly reduce CO2 emissions in the next 10 years”.
Mercedes was late to the all-electric party and only launched the EQS, an electric version of its flagship S-class saloon, earlier this year.
However, it will make eight all-electric cars on three continents next year and plans three new electric vehicle platforms for 2025. It will also build eight battery factories with partners to meet its needs of more than 200 gigawatt hours of battery capacity by 2030.
“The tipping point is getting closer and we will be ready as markets switch to electric-only by the end of this decade,” said chief executive Ola Kallenius.
Mercedes said it was buying electric motor maker Yasa, adding the Oxfordbased company’s tech would help it stay “a step ahead of the competition”.
Separately, oil giant Shell said 800 electric vehicle charging points will be installed at 100 Waitrose shops by 2025, as the pair expand their partnership.