Volkswagen Will Go after Tesla Motors’ Lead With five Fresh Electrified Cars
Volkswagen’s BUDD-e concept, shown earlier this year, is a futuristic battery-electric take on the iconic VW Bus. The very first of VW’s upcoming electrical models could go after similar lines. Photo source: Volkswagen.
Volkswagen (NASDAQOTH:VLKAY) is planning five fresh battery-electric models for its VW brand, all of which will have a range of at least four hundred kilometers (about two hundred fifty miles) — and we might see the very first of them as soon as next month.
Moving on from diesel: VW’s aggressive electric-car plans
In a fresh interview with German business magazine Wirtschaftswoche, VW brand chief Herbert Diess confirmed plans to bring five fresh electrical VWs to market. All will be based on the Volkswagen Group’s fresh modular electric-vehicle architecture — and they’ll be sold in the U.S., Europe, and China.
VW will demonstrate a concept car at next month’s Paris Auto Demonstrate that will be a “foretaste” of the very first model in the series. Diess said the fresh electrified VW is slightly smaller than the compact Golf hatchback on the outside, but its interior room is comparable to that of the midsize Passat. It will be all-electric, battery-powered, with a range of “400 to six hundred kilometers,” Diess said. (But note that Europe’s electric-car testing protocol generally yields longer ranges than U.S. testing methods. The range cited by Diess might translate to something more like two hundred to three hundred fifty miles under U.S. standards. That’s still awesome for mass-market electrified vehicles, but not radical.)
Diess expects the fresh electrified VWs to sell at prices comparable to those of similarly sized diesel-powered models in VW’s current lineup. But the very first one won’t go into production until late in 2018, he said. VW has a lot of work to do very first.
The very first steps in a ample transition: A million electrified cars a year by 2025
The VW Group includes a slew of automotive brands, most notably Audi and Porsche, in addition to the namesake VW brand. Both Audi and Porsche have shown concept versions of upcoming battery-electric models. Audi’s, an electrical SUV set to rival Tesla Motors‘ (NASDAQ:TSLA) Model X, is expected to begin production in the very first quarter of 2018. Porsche’s electrified sports sedan will go after somewhat later.
VW’s purpose is to be selling a million battery-electric vehicles a year by 2025. Getting to that number will require several mass-market models in addition to the luxury entries, and that’s where Diess’ VW brand comes in.
It will also require major switches to VW’s production facilities and a fresh global supply chain. Diess said that several VW factories will be set up to build electrical cars, possibly including one in North America. The supply chain is very likely a fatter challenge: Where will VW get all of the batteries it needs to power all of those vehicles?
For now, the effortless reaction is Asia: Several Chinese and Korean companies are aggressively expanding their lithium-ion battery-cell production capabilities. But Diess doesn’t want to be entirely dependent on Asian suppliers, and he hinted that VW may seek to build its own battery-production facilities in Europe.
German business newspaper Handelsblatt reported in June that VW was considering an $11 billion plan to build a massive battery-manufacturing facility at a site near an existing VW engine factory in Germany. The size of the investment suggests a factory that could rival, or even exceed, the planned output of the $Five billion Tesla Gigafactory presently under construction in Nevada. Diess hinted that the company may be seeking playmates for such an effort.
Will buyers demonstrate up for electrified VWs?
So far, electrified cars have been a hard sell in VW’s home market, Germany. Diess and other VW executives have suggested that the limited range of most current battery-electric vehicles is a limiting factor, and that sales will improve once ranges are comparable with gasoline- and diesel-powered alternatives.
That might be true. Tesla has shown that there’s a sizable potential market for well-executed electrical vehicles with good ranges. But importantly, Teslas are arousing, with sleek designs, swift acceleration, and features that thrill tech-minded buyers. Tesla CEO Elon Musk has said repeatedly that his company is attempting to demonstrate the big automakers how to successfully build and sell electrified cars — and for Tesla, that excitement is part of the equation. In Musk’s view, it’s not just enough to be comparable to gas-powered alternatives — electrical cars have to be better (at least in some ways) to get buyers’ attention.
More “ordinary” electrified vehicles may be a stiffer sell to buyers who are unacquainted with the technology and worry about the difficulty of recharging away from home, at least in the near term. Unless VW finds a way to include some Tesla-style excitement in its upcoming electrical cars, it may have to do a excellent deal of education in order to woo its customers to give them a attempt. That effort may involve retraining and incentivizing its dealers, in addition to the marketing and advertising costs.
In any event, it’s a massive shift by one of the world’s largest automakers. We’ll know more about VW’s plans to draw buyers to electrified cars when it takes the wraps off of its concept vehicle in Paris at the end of September.
John Rosevear has no position in any stocks mentioned. The Motley Idiot possesses shares of and recommends Tesla Motors. Attempt any of our Foolish newsletter services free for thirty days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Loser has a disclosure policy.
Volkswagen Will Go after Tesla Motors Lead With five Fresh Electrified Cars – The Motley Loser
Volkswagen Will Go after Tesla Motors’ Lead With five Fresh Electrical Cars
Volkswagen’s BUDD-e concept, shown earlier this year, is a futuristic battery-electric take on the iconic VW Bus. The very first of VW’s upcoming electrical models could go after similar lines. Picture source: Volkswagen.
Volkswagen (NASDAQOTH:VLKAY) is planning five fresh battery-electric models for its VW brand, all of which will have a range of at least four hundred kilometers (about two hundred fifty miles) — and we might see the very first of them as soon as next month.
Moving on from diesel: VW’s aggressive electric-car plans
In a fresh interview with German business magazine Wirtschaftswoche, VW brand chief Herbert Diess confirmed plans to bring five fresh electrified VWs to market. All will be based on the Volkswagen Group’s fresh modular electric-vehicle architecture — and they’ll be sold in the U.S., Europe, and China.
VW will demonstrate a concept car at next month’s Paris Auto Display that will be a “foretaste” of the very first model in the series. Diess said the fresh electrified VW is slightly smaller than the compact Golf hatchback on the outside, but its interior room is comparable to that of the midsize Passat. It will be all-electric, battery-powered, with a range of “400 to six hundred kilometers,” Diess said. (But note that Europe’s electric-car testing protocol generally yields longer ranges than U.S. testing methods. The range cited by Diess might translate to something more like two hundred to three hundred fifty miles under U.S. standards. That’s still outstanding for mass-market electrified vehicles, but not radical.)
Diess expects the fresh electrified VWs to sell at prices comparable to those of similarly sized diesel-powered models in VW’s current lineup. But the very first one won’t go into production until late in 2018, he said. VW has a lot of work to do very first.
The very first steps in a yam-sized transition: A million electrical cars a year by 2025
The VW Group includes a slew of automotive brands, most notably Audi and Porsche, in addition to the namesake VW brand. Both Audi and Porsche have shown concept versions of upcoming battery-electric models. Audi’s, an electrical SUV set to rival Tesla Motors‘ (NASDAQ:TSLA) Model X, is expected to begin production in the very first quarter of 2018. Porsche’s electrical sports sedan will go after somewhat later.
VW’s objective is to be selling a million battery-electric vehicles a year by 2025. Getting to that number will require several mass-market models in addition to the luxury entries, and that’s where Diess’ VW brand comes in.
It will also require major switches to VW’s production facilities and a fresh global supply chain. Diess said that several VW factories will be set up to build electrified cars, possibly including one in North America. The supply chain is very likely a fatter challenge: Where will VW get all of the batteries it needs to power all of those vehicles?
For now, the effortless response is Asia: Several Chinese and Korean companies are aggressively expanding their lithium-ion battery-cell production capabilities. But Diess doesn’t want to be entirely dependent on Asian suppliers, and he hinted that VW may seek to build its own battery-production facilities in Europe.
German business newspaper Handelsblatt reported in June that VW was considering an $11 billion plan to build a massive battery-manufacturing facility at a site near an existing VW engine factory in Germany. The size of the investment suggests a factory that could rival, or even exceed, the planned output of the $Five billion Tesla Gigafactory presently under construction in Nevada. Diess hinted that the company may be seeking playmates for such an effort.
Will buyers demonstrate up for electrical VWs?
So far, electrical cars have been a hard sell in VW’s home market, Germany. Diess and other VW executives have suggested that the limited range of most current battery-electric vehicles is a limiting factor, and that sales will improve once ranges are comparable with gasoline- and diesel-powered alternatives.
That might be true. Tesla has shown that there’s a sizable potential market for well-executed electrical vehicles with good ranges. But importantly, Teslas are arousing, with sleek designs, quick acceleration, and features that thrill tech-minded buyers. Tesla CEO Elon Musk has said repeatedly that his company is attempting to display the big automakers how to successfully build and sell electrical cars — and for Tesla, that excitement is part of the equation. In Musk’s view, it’s not just enough to be comparable to gas-powered alternatives — electrical cars have to be better (at least in some ways) to get buyers’ attention.
More “ordinary” electrified vehicles may be a stiffer sell to buyers who are unacquainted with the technology and worry about the difficulty of recharging away from home, at least in the near term. Unless VW finds a way to include some Tesla-style excitement in its upcoming electrified cars, it may have to do a good deal of education in order to coax its customers to give them a attempt. That effort may involve retraining and incentivizing its dealers, in addition to the marketing and advertising costs.
In any event, it’s a massive shift by one of the world’s largest automakers. We’ll know more about VW’s plans to draw buyers to electrified cars when it takes the wraps off of its concept vehicle in Paris at the end of September.
John Rosevear has no position in any stocks mentioned. The Motley Idiot wields shares of and recommends Tesla Motors. Attempt any of our Foolish newsletter services free for thirty days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Idiot has a disclosure policy.