By Sandhya Anand, Staff Writer
VW stakes a new war in Tesla’s EV territory. How long will it take before it supersedes Tesla’s carefully guarded crown?
Joining the electric car bandwagon, VW overtakes Tesla massively with plans to release new electric cars by the end of 2030. Herbert Diess, the chief executive officer of this German car company, had released a statement last year promising to invest €35bn to produce electric vehicles with 70 pure-play cars within the next decade. The market, however, did not respond much to this speculation. Tesla’s valuation skyrocketed over $800bn at the mere street chatter of establishing dominance over the electric vehicle platform while Volkswagen only collected over $100bn. The picture was clear: the competition had already picked its winner without it even starting.
However, Diess has been leaving a trail of hints that have been building up to this very moment. In September 2020, he hosted Tesla’s Technoking when Elon made a trip to Germany. Soon after, he opened a Twitter account which is filled with posts and images concerning a lot of technical jargon and concept car imaging. Last Monday, VW hosted their annual battery power-focused day where a surprising amount of information was released. VW will open six battery factories across Europe by 2030. They shall have a combined producing capacity of 240 gigawatt-hours a year. This would then produce cells for almost 5 million cars annually and help accelerate the plans of the German car company to establish and gain a strong market share. The company predicts that more than 70% of the sales in Europe and more than 50% in the US and China by the end of this decade. They also want to increase the number of charging stations across Europe by five times by the end of 2025. Diess claimed that VW would deliver 1m electric and hybrid cars in 2021, a five-time increase from 2020. Tesla is only projected to have a 50% increase. VW has also placed a 14bn order for batteries from Northvolt, the Swedish group that was founded by a pair of former tesla executives Peter Carlsson and Paolo Cerruti, making it the lead supplier in the area. This will eventually lead to Northvolt’s gigafactory, located close to the arctic circle in northern Sweden, to increase its capacity beyond the now maintained 40GWH as the company has more than $27bn orders from industrial customers. This will also reduce VW’s reliance on the current dominant global battery producers such as South Korea’s LG Che and China’s CATL, which also supply many other different carmakers.
“Volkswagen is a key investor, customer, and partner on the journey ahead and we will continue to work hard with the goal to provide them with the greenest battery on the planet as they rapidly expand their fleet of electric vehicles,” stated Peter Carlsson, Northvolt’s chief executive, and co-founder.
The market showed great excitement at the release of these plans. On Friday, VW’s ordinary shares closed at €231.40. Two days later, they started trading at €297 which was a complete 29% increase. VW’s preference shares are also up by 16%. On the other hand, after Tesla’s sell-off in February, they’re still struggling to catch a bid.