With an eye on China and a significant price cut, the German giant Volkswagen strikes back in the global battle for hegemony in the electric car market. A new version of Volkswagen’s electric ID.3 model will go on sale at the end of March for less than 40,000 euros ($42,000).VW announced this week.
This is a reduction of 3,000 euros from the current price of the ID.3, and puts it on the same level as the popular Model Y from the American manufacturer Tesla. Analysts see the downgrade as a direct response to several rounds of Tesla price cuts in recent months, with discounts of up to 20% in Europe and the United States.
Tesla’s sales have skyrocketed more than 900% in Germany in the past 12 months, according to figures from last January. Although the VW group was the main European manufacturer of electric cars in 2022, with 352,000 units sold, Tesla sales forced the hand of the German firmindustry analyst Ferdinand Dudenhoeffer told AFP.
The manufacturer will have no choice but to engage in “a price war” to defend its place in the disputed market for battery-powered vehicles, even if that means a reduction in its profit margins.
VW Group Chairman Oliver Blume has so far ruled out a general price cut on its electric cars, but the issue should come up when the group presents its 2022 financial results on Tuesday. Tesla It’s not VW’s only concern. In China, the world’s largest market for electric cars, the German company is falling behind its local competitors.
the chinese challenge
The Asian giant represents 40% of the VW group’s sales, mostly cars with combustion engines, which gives it a 16% share of the Chinese market. But in the electric segment, the Volkswagen brand has a market share of just 2.4%, below Tesla’s 7.8% and China’s BYD’s 16%.
Several other Chinese automakers, including Wuling, GAC and Chery, also outperform VW, according to data from the Handelsblatt business daily. Also German Mercedes-Benz and BMW lag even further behind in China, with less than 1% each.
“In the world’s largest car market, German manufacturers have so far lagged behind local brands,” said expert Stefan Bratzel in his annual report on electromobility. Of the more than 5 million electric cars sold in China in 2022, VW placed only 155,700.
With information from AFP
Source: Larepublica
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