WoodMac: Volkswagen Will Be World’s Biggest Electric Car Maker by 2030

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German automotive giant Volkswagen will grow to be the biggest manufacturer of EVs earlier 2030, according to new analysis from Wood Mackenzie.

WoodMac anticipates Volkswagen to produce 14 million battery powered electric vehicles (BEVs) cumulatively by 2028, and climb out of its 2018 standing since the 10th biggest manufacturer to the very top of this worldwide pile. 

VW’s own target is to create 22 million BEVs from 2028. But that looks unrealistic, based on Ram Chandrasekaran, principal analyst at Wood Mackenzie.

Selling 22 million EVs would signify capturing 53 percent of the BEV market share outside to 2028, according WoodMac's base-case scenario. “The company would also need to secure 57 percent of all EV battery pack production, something that would prove to be extremely challenging,” said Chandrasekaran.

The 14 million figure is based on VW’s own plans and production capacity, plus anticipated incremental improvements. While short of VW's own goal, it would still represent a very healthy 27 percent share of the global market.

Even at the projected 27 percent market share, VW would need access to three-tenths of the world's EV battery cell production.  

VW has a number of supply contracts in place today, including a lithium supply deal with Ganfeng and cell supply deals with Samsung SDI, LG Chem, SK Innovation and CATL, Chandrasekaran noted. Most recently, VW invested $1 billion in Northvolt, a Swedish battery manufacturer.

“However, there were problems with a number of those companies, thus threatening VW'therefore aims,” Chandrasekaran stated.

Competition from Elon Musk

In a separate piece of study, WoodMac stated it anticipates Tesla to sell 6 million BEVs between 2018 and 2028. However, Tesla could supercharge its efforts if it released an car around the 25,000 mark hitting 8 million units.

Tesla has stated it needs to restrain 1 percent of global car sales, not just BEVs, but Chandrasekaran said the business would need to expand its offering to get there, including the possible launching of an entry-level car.

Chandrasekaran noted the car most often traded for a Tesla Model 3 is a Toyota Prius, the latter of”which is incidentally priced at $24,200. ” The release of an entry-level car could see Tesla reach that 1 percent goal as early as 2024.

Analyst upgrades and progress with its factory in China have seen Tesla’s share price surpass $500 for the first time, even though the company did not turn a profit in 2019.

“Tesla seems to maintain a strong place,” said Chandrasekaran.

“The company has secured $1.6 billion [of] financing from state-backed lenders at interest rates lower than the People's Bank of China’s market rate. It also has. . .contracts with LG Chem and CATL to supply battery packs for its new factory.”

Pilot production at its China factory location has started and mass production is anticipated this year, decreasing the production capability of this Model 3 in the process.

Land was acquired for a Tesla manufacturing website, anticipated to be in Berlin.

The base of factories can help soften any impact from the trade wars, stated Chandrasekaran.

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