Although casual observers may think that the rise of electric vehicles will only benefit the environment and consumers, Ralf Brandstatter, CEO of Volkswagen Group's China business, expressed many concerns about the current rapid rise of the electric vehicle market. Brandstadt expressed his concern about the problems that will eventually harm the interests of consumers when he addressed the 2023 China Auto Forum in Shanghai.
"At present, there are more than 120 automobile manufacturers in the [EV] market, and about 2023 new models will be launched in 150 years," he said. "The fierce market competition and high battery prices have put them under severe economic pressure. The success of short-term sales requires very high capital investment. We are facing an overheated market. The consolidation of the competitive environment is in full swing.
Brandstatter said that electric vehicle start-ups are facing financial pressure. Many start-ups have either left the market or are about to leave the market. Consider the ongoing struggle between Lodztown and Endurance Pickup; The Ohio based company suspended truck production earlier this year because of high production costs and quality problems. According to Reuters, its partnership with Foxconn is under pressure and recently filed for bankruptcy and sued its partners.
The boss of Volkswagen China is also highly critical of China's recent electric vehicle discounts. "In recent months, intense competition has led to substantial price discounts," Brandstatter said. "This will ultimately harm the interests of consumers. They will no longer be able to get services from retired brands, or they will see a sharp reduction in the price of the models they buy. This will affect the residual value.
It is no secret that these specific comments are aimed at Tesla, because the electric car giant will significantly reduce the price of its product line in early 2023, triggering a price war.
Oliver Blume, CEO of Volkswagen Group, soon said that the German automaker would not participate in the price war of electric vehicles in April Model Y （ parameter | picture ）That's a big drop.
"For us, the profitability of the business is the most important," Brandstatter said. "We will not engage in unhealthy market competition in order to achieve short-term delivery growth.
This may be the case with Volkswagen, but now it is impossible to ignore the soaring sales after Tesla's price cut in the second quarter of this year. For Volkswagen, it will continue to focus on the recognized shrinking internal combustion engine market, because it still provides considerable cost advantages for the brand.
Brandstatter also emphasized that Volkswagen pays attention to hybrid technology, including plug-in hybrid vehicles, which is the position held by Toyota, another automobile giant for a long time.
It is interesting to know how automobile manufacturers balance the continuous profitability of internal combustion engine vehicles with the burgeoning lineup of electric vehicles, and whether they choose to control some bolder predictions, that is, when the pure electric range may be achieved. It is reported that Mercedes is planning to slow down its electric vehicle transformation, so Volkswagen and Toyota are not the only people who are more cautious in approaching this era.
In the short term, price reduction and fierce competition seem to be good, but the long-term impact is small, especially for early adopters of electric vehicles.
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