Volkswagen is reportedly engaged on a less expensive electrical automobile platform to be constructed and bought in China. The primary electrical automotive on this platform is meant to return to market in 2026, based on Handelsblatt, and the goal worth in euro phrases is €20,000 ($22,000).
The Chinese language EV platform might or will not be bought exterior of China. Useful, I do know, however what we all know from that is that it gained’t positively be bought solely in China.
As Handelsblatt summarizes, “VW has an acute have to catch up in crucial electrical automotive market.” That’s definitely the case. Volkswagen has fallen fairly far behind within the Chinese language EV market, and Volkswagen’s world gross sales are closely depending on the Chinese language auto market, so there should be no less than a tinge of panic at VW headquarters about this fast-evolving market. Plus, once you see the high-tech competitors in China, effectively, that’s downright scary to a legacy automaker. Simply final week, the extraordinarily compelling — top quality and reasonably priced — Zeekr 007, BYD Sea Lion, and XPeng X9 have been launched.
Plainly Volkswagen might have come to the conclusion that as a way to compete within the present EV market, what it actually must do is use its economies of scale and manufacturing prowess to place reasonably priced electrical vehicles available on the market — and its model will do the remaining. The corporate can also be reportedly going to convey a extra reasonably priced electrical automotive to the US market and produce electrical vehicles extra cheaply in Mexico. Are these efforts related to the Chinese language plans? Immediately, I don’t assume so. Nevertheless, broadly, the general objective of driving down prices and providing extra reasonably priced EVs are doubtless a part of a targeted world effort.
There’s a giant distinction between a $35,000 EV and a $22,000 EV (the estimated US worth of a coming EV vs. the rumored Chinese language worth of a low-cost electrical automotive). They might or might not have elements in frequent, however they’re unlikely to be basically the identical mannequin. Like BYD is doing, although, it’s a must to assume that an reasonably priced electrical automotive (or electrical automotive platform) created in China for the Chinese language market could possibly be simply barely modified for gross sales in South America, Africa, and different components of Asia.
However actually, the main focus is China. China accounts for greater than half of the world’s electrical automotive gross sales. It’s a hyper-competitive market. Ralf Brandstätter, the pinnacle of Volkswagen’s Chinese language efforts and a member of the Board of Administration, says it bluntly that it’s “not as straightforward because it was once to develop in China.” Certainly.
Whether or not Volkswagen’s efforts to go downmarket and bolster gross sales in China will work, who is aware of? There’s loads of uncertainty about what can work for Volkswagen (or nearly any model) in China. The EV market is dominated by BYD and Tesla.
Because the chart above (and our newest China EV gross sales report) reveals, the 5 high promoting plugin vehicles in China come from BYD and Tesla, and 9 out of the highest 15 come from BYD and Tesla — 7 from BYD. There isn’t a mannequin from a non-Chinese language legacy automaker within the high 20. The Volkswagen ID.3 barely earned the #20 spot in July 2023. That’s the final we’ve seen from a non-Chinese language legacy automaker.
Maybe Volkswagen is banking on an ID.2 to show issues round and return to the highest 20. Maybe it is going to have another type of Chinese language branding — a Volkswagen Mini Me or one thing. We’ll see.
