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Volkswagen wants the world to know that it goes on electricity. Herbert Diess, managing director of the German company, told the automotive press that VW's new electric car platform is designed to produce 50 million vehicles over the next few years (although the company did not give precise calendar), according to AutoBlog. To put this in perspective, VW sold 10.7 million vehicles last year.
The company has already inaugurated an electric car factory in China and secured a battery source for 50 million cars, Diess told Automotive News in an interview published on November 12. "I think we have the best installation strategy for electric vehicles." Come on, said Diess.
Tesla continues to decimate the competition in its category, and even outside of it. The Model 3 was the best-selling electric car in the United States in the third quarter of 2018 and the fifth-best-selling sedan. With the S and X models, Tesla occupies three of the top four places among the best-selling electric cars.
Major automakers can no longer resort to a wait-and-see strategy on electric cars. Although Tesla remains small, it nibbles sales of conventional vehicles. According to Atherton Research, Tesla would be for the first time more sold in the United States earlier this year in the United States. Now, Tesla is competing to compete with VW, Toyota, GM, Ford and other automakers out of its luxury niche.
But automakers are starting to play their mass production mass, and the economy in the lower price range is ruthless. Profit margins on high-end sedans and SUVs, priced around $ 100,000, give Tesla some leeway if its production processes are not performing well. But the $ 35,000 base price that Tesla promised for its mid-range sedan, the Model 3, leaves much less room for maneuver. For now, the base purchase price of a Model 3 is still $ 45,000.
VW understands this and intends to calm the sails (and sales) of Tesla by offering its entry-level EV for less than € 20,000 ($ 23,000). VW votes this week (Paywall) on accelerating EV production, while transferring part of the assembly of heavy-duty internal combustion engines from Germany to the Czech Republic, where the workforce is less expensive. Meanwhile, electric cars will continue to be assembled in Germany. If VW moves these projects forward, it will mean a real philosophical shift for the company moving away from internal combustion engines – the first commercial versions were invented in Germany – for the benefit of electric vehicles.
The first model of VW's new electric "ID" series will debut in early 2020.
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