You needn’t delve far into history to understand the disquiet sparked by Volkswagen Group (VWG) CEO Herbert Diess’s recent bold assertion that his firm wants to battle with Tesla to become the world’s biggest EV manufacturer by 2025.
Similar rhetoric was common at VWG in the years prior to Dieselgate, and while the reasons for the deceit that caused that scandal are many and varied, that quest for world domination leading to total humiliation is as towering an example of corporate hubris as you will find.
So it was that Diess’s words sent commentators into overdrive, in part because of that supposed arrogance of the ambition and in part because chasing volume over profit goes so far against the grain of the car industry at the moment, much of which is enjoying best-ever margins despite historically low sales.
It’s also punchy rhetoric in every respect. In the first quarter of this year, VWG registered only the fourth-highest numbers of EVs globally (98,000), after Tesla (310,000) and Chinese companies SAIC (154,000) and BYD (144,000). In fact, it was more challenged by Hyundai-Kia (82,000) than challenging of those ahead.
No wonder Diess ruefully said that some competitors aren’t burning the midnight oil but rather the “3am oil” as they strive to do better.
Nobody can argue with the suggestion that there’s no room for complacency.
Closing that gap looks to be an almighty task that will require, depending on where you forecast demand and production capacity for Teslas going, a sales rise of somewhere between five and 10 times in just three years.
Yes, price parity between a diesel car and an electric car should have arrived by 2025 and yes, VWG’s cheapest EV yet, the Volkswagen ID 1, should be on sale. But that target remains an extraordinary stretch, no matter how quickly the pool of would-be buyers grows.
Stoking the flames just days later, Renault’s director of sustainable development, Cléa Martinet, pointedly said that firm won’t chase the top of the EV sales chart but rather focus on building a profitable business with a long-term future, although it wants “a podium” place in the sales charts.
Her words were rather better received than Diess’s, largely by investors lured by the prospect of everyman EVs like the Renault Zoe making way for more expensive (and more special) ones like the upcoming Renault 5.
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