Volkswagen AG’s plan to produce electric vehicles is no longer in effect.
The eponymous VW brand, which has presented the ID family of electric vehicles as central to its future, admitted It will need more plug-in hybrids last week as electric vehicle sales slow.
This is just the latest adjustment VW has made to its electrification efforts. strategy after the company failed to launch several models and fell behind in China, where local brands now dominate. The manufacturer also has deferred efforts to find outside investors for its battery division and written off plans to build a €2 billion ($2.2 billion) electric vehicle plant in Germany.
In fact, the automaker sells so many cars that still run on internal combustion engines that it could exceed emissions standards next year, so Chief Executive Officer Oliver Blume has asked European regulators condescension. It’s a sharp turnaround from just three years ago, when VW aggressively lobbied for electric vehicles in the European Union. faults opened between the company and some of its colleagues in the region.
VW had no choice but to lean toward touting electrification after betting big on clean diesel engines. That bet went awry when the company was caught cheating on emissions tests, forcing a dramatic shift toward battery-powered vehicles. By 2019, then-CEO Herbert Diess announced the launch of entire 75 all-electric models over the next decade.
His electric-or-bust strategy (Diess argued that automakers needed to change quickly if they wanted to survive) irritated executives from Turin to Tokyo, who needed more time and flexibility to transition away from internal combustion engine cars. The CEO even praised what he saw as the benefits of moving early.
Electric mobility has “won the race,” Diess said as he presented VW’s battery strategy for 2021. “Many in the industry questioned our approach. Today they follow this example, and we reap the benefits“
While those benefits haven’t been as numerous as VW had hoped, the company isn’t abandoning electric vehicles entirely.
Blume is partnering with companies like Xpeng Inc. to prepare new brand of electric vehicles VW is also in talks with European peers including Renault SA to develop cheaper electric vehicles to capture the mass market. car buyer market.
VW is not alone in needing to recalibrate due to slowing growth in electric vehicles. Countries including Germany and Sweden have stopped or reduced subsidies for electric vehicles, which still tend to be more expensive than combustion engine equivalents, hurting the wider sector. Gaps in public charging networks also continue to deter potential buyers.
Stellantis NV said on Tuesday it will sell cars joint development with a Chinese partner in Europe since September as it tries to lower the cost of its electric offerings. Mercedes-Benz Group AG has stopped developing the basis for new electric luxury sedans to save money and plans to sell gasoline-powered vehicles. longer than expected. BMW AG, which had more success outselling its German rivals, this week it still warned that the EU’s plan to effectively ban sales of new combustion engine cars by 2035 would damage the industry. European regulators plan to review the policy in 2026.
The slowdown has even hit Tesla, which has lost $235 billion in market capitalization this year, more than triple VW’s current valuation. CEO Elon Musk, however, criticized automakers for the rollback.
“The pace of electric vehicle adoption is under pressure worldwide, and many other automakers are moving away from electric vehicles and opting for plug-in hybrids instead,” Musk said last month while discussing Tesla’s first-quarter earnings. “We believe this is the wrong strategy and electric vehicles will ultimately dominate the market.”