Volkswagen to face Tesla on Chinese electric vehicle market

While VW announced its intention to manufacture an electric sport utility vehicle (SUV) for the Chinese market, the competitive climate of the Asian economy over the next decade could drastically heat up on the largest electric vehicle market in the world. world.

VW to enter the circle of electric vehicle manufacturers could affect the US electric vehicle manufacturer Tesla – which already sells its Tesla X SUV in China – and could challenge the position of the US automaker in the coming years, which had already experienced conditions more difficult market.

If the German automaker succeeds in selling a competitive SUV EV product, Tesla may be forced to sell a market share.

In the face of the slowdown in the economy and the collapse of the car market, local and foreign car manufacturers have made an offer on electric cars, the Chinese government granting preferential treatment as part of its green federal policy to promote electric vehicles. Many, including smaller manufacturers, would expect a chance to compete with Tesla.

The Roomzz ID, the latest addition to the VW family ID, was announced in anticipation of the Shanghai International Auto Industry Show. The zero emission vehicle will be available from 2021.

VW Managing Director Herbert Diess said the company plans to produce more than 22 million electric cars in the next 10 years and that half of its engineers are working on products for the Chinese market.

Volkswagen has won the trust of many Chinese consumers. In 2018, it announced a sales record but had difficulties in early 2019.

Its sales strategy includes China in its growth strategy. The automaker also announced the compact Jetta earlier in the year. The product is not an electric vehicle, but aggressively targets the first buyers of Chinese cars residing outside metropolitan areas where growth potential remains high and government restrictions are relatively low.

With Jetta (VW promises to introduce a sedan and two SUVs later in the year) the company is on the move to further strengthen its position in China and to win fast-growing middle-clbad customers, many of whom are unable to afford a first car.

By focusing more on China, VW can hope to offset the substantial losses suffered by the sector. scandal of diesel emissions who still haunts the firm in reputational damage. In China, the scandal caused moderate ripples with only 1,946 imported Tiguan SUVs and four imported Pbadat B6 sedans were recalled.

In 2015, a group of business executives and environment officials, including Tesla CEO Elon Musk, pleaded for regulators to "absolve" VW from recalling 85,000 diesel vehicles affected by the scandal in the United States. Vehicles.

Yesterday, VW Winter had seen its former general manager Martin Winterkorn, indicted in Germany for his involvement in the corporate scandal.

Tesla will probably not give up China without fighting. In March, it was announced that Tesla would increase production in China and mbad produce a compact SUV called Model Y. This is the fourth edition of the Tesla production line and is expected to be commercialized next year. It will start at $ 39,000 (£ 29,800) and will be considerably less expensive than the Model X luxury SUV.

According to information provided by Cleantechnica in February, the total share of foreign car brands in China remains strong (5%), but increases to 8% when import figures are included. VW holds 2% of the market – by far the best-selling foreign brand in China, while Tesla holds an additional 2%.