Volkswagen could outsell Tesla in electric car sales by 2024. Subscribe to Electric Vehicle News Bitesize Podcast for FREE!
Volkswagen has been saying for years that it will one day outsell Tesla in electric vehicle sales. According to a new report from Bloomberg Intelligence, that could eventually happen as early as 2024. Analysts believe that the two automakers will compete for the lead in global electric vehicle sales in the next few years, leaving the rest of the auto industry far behind.
With ten different brands – ranging from Volkswagen to Bentley, the Volkswagen Group ranges in price and prestige – the Volkswagen Group can sell a variety of electric models in the global market, such as the Audi e-Tron model, the Volkswagen ID3 compact models, as well as the ID4 SUV and the high-performance Porsche Taycan. All Volkswagen Group brands are expected to do more in the coming years. Tesla’s limited model lineup makes it particularly vulnerable to Volkswagen’s range and pricing.
Two markets, China and Europe, will be particularly important in determining the leadership of electric vehicles in the coming years. Regulations in both places strongly support electric vehicles. Electric vehicles will account for 25 percent of total car sales in China and 20 percent in Europe by 2025, the report said. Volkswagen, headquartered in Germany and with factories in Europe, already leads Tesla in electric vehicle sales.
In China, Volkswagen is currently well behind Tesla in Electric Vehicle sales, accounting for just 3.5% of the country’s market last year. Tesla will account for 13% of Electric Vehicle sales in China in 2021, on par with China’s own BYD and behind another Chinese automaker, Wuling, which sells 16% of its EVs in China. The remaining 55% of Electric Vehicle sales in China come from a number of smaller automakers, mostly Chinese. Electric models currently account for only 11% of all car sales in China, but the share is expected to rise rapidly as regulations burden automakers who don’t sell EVs while rewarding those who do.
Tesla’s lineup of only two locally-produced models in China — the Model 3 sedan and Model Y SUV — is particularly thin, making it vulnerable to increasingly attractive offerings from local manufacturers and Volkswagen, the analysis said. Additionally, Tesla has committed its Shanghai factory to produce for export rather than the local market.
Analysts at Bloomberg Intelligence had previously expected Volkswagen to overtake Tesla globally by 2023. Tesla’s push to open new factories in Texas and Germany pushed back the date. However, the added year also hinges on Tesla launching the Cybertruck, which analysts at Bloomberg Intelligence admit is “questionable.” Tesla has repeatedly pushed back the launch date of its Cybertruck electric pickup.
Kevin Tynan, a North American auto analyst at Bloomberg Intelligence, said the Cybertruck is not expected to be a huge boost to Tesla’s sales. It will compete with electric trucks from established truck makers such as Ford and General Motors. With its quirky design, the Cybertruck will primarily appeal to Tesla adherents, who will only see it as a new and different Tesla product. General Motors, Ford and Stellantis are expected to launch the Ram electric pickup in 2024, and they won’t easily let Tesla steal pickup truck sales.
“That’s the one segment that is, by retail revenue, the largest for our domestic automakers,” said Tynan. “That’s the turf they’re going to protect more than any other.”
According to Bloomberg, if Volkswagen puts Tesla in second place in the global electric vehicle market in 2024, the two automakers will be well ahead of all other automakers in Electric Vehicle sales per vehicle that year, exceeding 2 million. China’s BYD is expected to lead the pack, selling 1 million electric vehicles by 2024.
What happens after that, Tynan said, will largely depend on when EVs can become independently profitable for automakers without government intervention. Once that happens, established automakers will enter the market, which could put more pressure on Tesla. GM’s publicly announced 2035 target date for building zero-emission vehicles can only provide a reliable indication when that might happen, he said.
“Do you think if GM wanted to — if there was money to be made in that product — it would take them 15 years to get there?” he said. “No. It’s them looking at the timeline.”
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