Volkswagen AG’s all-in plan for electric vehicles is no longer valid.
The eponymous VW brand, which saw its ID family of electric cars as central to its future, authorized Last week, more plug-in hybrids are needed as electric vehicle sales decline.
This is just the latest adjustment VW has made to electrification strategy after the company botched several model releases and fell behind in China, where local brands now dominate. The manufacturer has it too on the shelf Efforts to attract outside investors to its battery unit and scrapped is planning a 2 billion euro factory for electric vehicles in Germany.
In fact, the automaker is selling so many cars that still run on internal combustion engines that it is on track to exceed its emissions limit next year, prompting Chief Executive Oliver Blume to ask European regulators to do so indulgence. It’s a significant turnaround from just three years ago, when VW aggressively lobbied for electric vehicles in the European Union Trenches opened up between the company and some of its competitors in the region.
VW had little choice but to embrace its electrification message after betting heavily on “clean” diesel engines. That bet unraveled when the company was caught cheating on emissions tests, forcing a hard switch to battery-powered vehicles. By 2019, then CEO Herbert Diess announced plans to bring up to 100,000 copies onto the market 75 fully electric models in the next decade.
His “electric cars or bust” strategy – Diess argued that automakers would have to change quickly if they wanted to survive – angered executives from Turin to Tokyo who wanted more time and flexibility to transition away from internal combustion engines. The CEO even praised what he saw as a first-mover advantage.
Electromobility has “won the race,” said Diess when presenting VW’s battery strategy for 2021. “Many in the industry have questioned our approach. Today they are following suit as we do reap the fruits.”
Although this haul wasn’t as big as VW had hoped, the company isn’t turning away from electric cars entirely.
Blume enters into and prepares partnerships with companies such as Xpeng Inc a new EV brand in China, offering models equipped with gadgets such as an in-car avatar to win back young consumers who have lost out to BYD Co. and Tesla Inc. VW has also been in talks with European rivals, including Renault SA, about developing cheaper electric vehicles to gain mass appeal. Market for car buyers.
VW isn’t alone in needing to recalibrate due to the EV slowdown. Countries like Germany and Sweden have stopped or cut subsidies for electric cars, which still tend to be more expensive than combustion engine vehicles, hurting the entire sector. Gaps in public charging networks also continue to deter potential buyers.
Stellantis NV announced Tuesday that it would sell cars co-developed Starting in September, it will work with a Chinese partner in Europe to reduce the costs of its electrical offerings. Mercedes-Benz Group AG has stopped developing underpinnings for new electric luxury sedans to save money and plans to sell gasoline-powered cars longer than expected. BMW AG, which had more success The country, which sells more electric vehicles than its German rivals, nevertheless warned this week that the EU’s plan to effectively ban sales of new internal combustion engine vehicles by 2035 would hurt the industry. European regulators are expected to review the directive in 2026.
The slowdown has dealt a blow even to Tesla, which has lost $235 billion in market capitalization this year, more than three times VW’s current valuation. Nevertheless, CEO Elon Musk criticizes the regression of automobile manufacturers.
“The global adoption of electric vehicles is under pressure, and many other automakers are pulling away from electric vehicles and relying instead on plug-in hybrids,” Musk said last month when discussing Tesla’s first-quarter results. “We believe this is not the right strategy and electric vehicles will ultimately dominate the market.”