Volkswagen Has An Opportunity To Bankrupt Top Competitors
Credit to Author: Zachary Shahan| Date: Tue, 20 Aug 2019 02:55:27 +0000
Published on August 19th, 2019 | by Zachary Shahan
August 19th, 2019 by Zachary Shahan
We spend a lot of digital ink on Tesla here on CleanTechnica. This is logical for a few reasons — Tesla sells by far the most popular electric car ever produced, that car now routinely makes it into top 10 lists for top selling cars and top selling vehicles (sometimes even at #1), and the company is the only large company that is 100% focused on electric transport and renewable energy. However, as CEO Elon Musk and many others have said, in the transport sector alone, we need far more than Tesla in order to solve our climate, pollution, and energy crises.
While we all appreciate what Tesla does, I don’t think many Tesla fans think Tesla is going to solve our main transport problems alone. Many of us have hope that other automakers will step it up and switch at least somewhat quickly to electric transport. Some of us are bullish about Kia and Hyundai, some about Nissan and Renault, some about Chinese automakers, and some about Volkswagen, but the bottom line is that we need tens of millions of EV sales a year, not just millions, and that means we need at least a few leading companies.
Musk has said that there are two core matters investors should be focused on when evaluating automaker potential — batteries and autonomy. I’m skipping autonomy here, since it’s hard to conclude that any other automaker has a good plan in place for this, and also since many people are still skeptical about Tesla’s plans and self-driving vehicles themselves. If Tesla is in the lead, it’s hard to see who’s second. If Tesla isn’t in the lead, it’s hard to see who’s first. In any case, the more immediate and very practical issue of batteries is a somewhat more transparent beast.
Here are a few things we know about batteries:
As long as they all slow-walk it, Tesla can take some of their sales but not enough to bankrupt any of them, especially since the conquest sales are spread all over the place. Consumers either fall into the relatively small camp of people who know a lot about Tesla and see its compelling attractions or the much larger camp of people who go to a conventional automaker for a car when they need one and are unlikely to be funneled into an EV.
However, what if a major automaker gets serious and disrupts that state of equanimity?
That is something I think Volkswagen Group is able to do, and is potentially on the verge of doing. If it’s not, it sure as hell should be.
There are a few positive signs that Volkswagen is prepping to get nasty in this market, and thus has the opportunity to land a lot of conquest sales.
Volkswagen Crozz photos courtesy Volkswagen
Volkswagen Vizzion concept photos courtesy Volkswagen
Photos of VW ID.3 concept courtesy Volkswagen
We’ve seen how well the Tesla Model 3 has been selling — routinely one of the top 10 cars in the US, the #1 car by revenue in the US, sometimes the #1 car or even #1 passenger vehicle in some European countries, and absolutely dominant in its vehicle class. If VW offers the ID.3 and ID.CROZZ at the right price with the right specs, those vehicles could see similarly disruptive demand, just appealing more to consumers who want a traditional brand, a normal dealer/service network, and a less revolutionary interior and infotainment.
The question is, how many mainstream consumers are not into the “rEVolution” to the point that they bought/want a Tesla but are still open to it enough that they will buy a fully electric VW? I imagine this is what VW is feverishly trying to figure out. However, I hope the company is committed to doing what Stackmann said it could do: creating the market.
Image of VW Buzz courtesy of Volkswagen.
The benefits of EVs are evident for anyone who spends a little time with one. The crossover point of battery/EV competitiveness is already in play. The last big step is showing consumers the benefits and that the downsides have mostly dissipated thanks to improved batteries and improved charging infrastructure. It shouldn’t be hard at all for a VW dealer to funnel someone coming in for a Golf or Tiguan into an ID.3 or ID.CROZZ, respectively. It shouldn’t be hard for VW to market to normal car buyers in a way that moves them from a Toyota Camry to an ID.VIZZION, from a Honda Civic to an ID.3, and so on. If VW can play this transition well, it can grab so many conquest sales from Toyota, Honda, BMW, and others that it could solidly secure its place at the top of the automaker food chain.
Of course, if Tesla is scoring millions of conquest sales a year and Volkswagen is scoring millions of conquest sales a year, other automakers are going to be losing those sales. It’s hard to imagine that won’t mean some bankruptcies in the auto industry.
We’ll see.
Volkswagen Group currently sells almost 1 million vehicles a month. In July 2019, the number was 886,100, a 2.4% drop compared to July 2018 (908,100). It sold 393,600 vehicles in Europe, 334,800 in the Asia-Pacific region, 80,700 in North America (55,800 of those in the USA), and 53,000 in South America.
It’s unclear how many of these sales are electric vehicle sales, but the conglomerate has a few thousand electric vehicle sales a month in Europe and a couple thousand in the USA. Its internal EV market share globally is somewhere around 1%.
The company’s market cap is currently €72.574 ($80.47).
Related:
What Have We Just Learned About The 2020 Volkswagen ID.3 All-Electric Hatchback?
Volkswagen’s Tremendous Transformation To Electric Vehicles — Some Context & Commentary
Zachary Shahan Zach is tryin’ to help society help itself (and other species). He spends most of his time here on CleanTechnica as its director and chief editor. He’s also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don’t jump to conclusions.