Volkswagen Will Be World’s Largest EV Manufacturer By 2030, Claims New Report
Credit to Author: Steve Hanley| Date: Wed, 15 Jan 2020 16:39:10 +0000
Published on January 15th, 2020 | by Steve Hanley
January 15th, 2020 by Steve Hanley
Consulting firm Wood Mackenzie says in its latest report that Volkswagen is on pace to be the largest manufacturer of electric cars by the end of this decade. It is currently in 10th place globally. The company says it expects to produce 22 million battery electric vehicles by 2028.
Image courtesy of Volkswagen
But Wood Mackenzie principal analyst Ram Chandrasekaran tells GreenTech Media that to reach that goal, Volkswagen will need to capture 53% of the global market for electric cars between now and 2028. “The company would also need to secure 57% of all EV battery pack production, something that would prove to be extremely challenging,” he says.
He thinks it is more realistic to expect Volkswagen to produce about 14 to 16 million EVs in the coming decade. Even those reduced numbers would represent 27% to 39% of the global market and make VW top dog in the electric car world.
In an online research note, Chandrasekaran writes, “VW views battery electric vehicles as the most effective means of CO2 reduction. Currently, there is very little overlap between the top ten automakers and top ten BEV makers. In fact, only three companies – Nissan, Hyundai and VW – appear on both lists. VW sat in second place, behind Toyota, for all car sales in 2018, however dropped down to tenth place for BEV sales in the same year.”
The company obviously has to have its supply chain in place to achieve the production totals it projects. “VW has reached an agreement with Ganfeng to supply lithium for the next decade,” Chandrasekaran notes. “It also has cell supply deals with Samsung SDI, LG Chem, SK Innovation and CATL. Most recently, VW invested $1 billion in Northvolt, a Swedish battery manufacturer.” If any of those suppliers falter, the company’s targets could be negatively affected, he adds.
Tesla is ramping up production at a torrid pace these days. Might it challenge Volkswagen for the lead in the electric car sales race? In a separate research note, Wood Mackenzie says that could only happen if Tesla introduces less expensive, entry level cars — something Volkswagen is already planning on doing, especially in the critical China market.
During the Q3 conference call in 2019, Elon Musk said he expects Tesla to control 1% of the global new car market. But Ram Chandrasekaran thinks Tesla will need less expensive offerings to reach that goal. “Tesla CEO, Elon Musk, has publicly discussed the possibility of launching an entry-level car to compete in a new market. Interesting to note, the most traded-in car for a Model 3 is a Toyota Prius — which is incidentally priced at $24,200. If Tesla successfully launched such a vehicle, the company would be well positioned to hit its 1% target by mid-2020s.”
It is wonderful news that Volkswagen expects to sell more than 20 million electric cars in the coming decade and that Tesla is building new factories in China and Germany. But there are billions of internal combustion powered vehicles in the world and they all must be replaced if there is to be any hope of lowering worldwide carbon emissions. It is not enough to celebrate the fact that the EV revolution is finally happening. It must be completed and as soon as possible.
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Steve Hanley Steve writes about the interface between technology and sustainability from his homes in Florida and Connecticut or anywhere else the Singularity may lead him. You can follow him on Twitter but not on any social media platforms run by evil overlords like Facebook.