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(Bloomberg) – In about a year, Volkswagen AG could catch up with Tesla Inc.'s ability to make electric cars.
The world's largest automaker said on Tuesday it is building two factories in China, producing a total of 600,000 vehicles on its battery-car platform, called the MEB. The new factories in Anting and Foshan will open a few months after the German Zwickau, which will assemble up to 330,000 cars a year and is expected to start before the end of the year.
Running projects to reach this scale will probably leave Tesla behind. Its only vehicle assembly plant in Fremont, California can produce approximately 500,000 cars. The leader of the electric car plans to start production in the suburbs of Shanghai at the end of this year and produce 250,000 vehicles a year.
VW has little time to waste after Tesla has decided to make snafus in Fremont and at its battery plant near Reno, Nevada, which could start building model Y crossovers. Model 3 faded in the first quarter, after a strong second half of 2018, CEO Elon Musk dismissed concerns over demand and held to the forecast of 400,000 vehicles delivered this year.
VW plans to produce some 70 battery – powered models for its 12 car brands by 2028 and to manufacture 22 million electric cars over the next decade. Herbert Diess, chief executive officer, says alternative technologies such as fuel cell cars will struggle to compete, contributing to the biggest effort of the auto sector to switch from combustion engines to around 30 billion euros (34 billion dollars).
"Volkswagen is leading the competition on electronic mobility," said Diess during a speech at the company's annual meeting in Berlin. "As a society, we will succeed the electric car – with the right products, superior bases and global economies of scale."
The automaker, which is also considering sites for more electric car factories, has opened reservations this month for its electric ID.3 sedan. He has collected more than 15,000 buyer orders representing 1,000 euros of deposit.
VW plans to team up with Swedish Northvolt AB to start production of battery cells for electric cars in Salzgitter, Germany, a spokesman for the German manufacturer in Berlin said. Diess said the plant near VW's headquarters would earn nearly a billion euros in investment and should be able to start deliveries by 2022 or 2023.
Tesla, meanwhile, is building a factory in Germany, said Musk in a tweet last month after declaring last year that BMW AG, Daimler AG and VW were the first choice for a site of cars and batteries in Europe.
To contact the journalists on this story: Elisabeth Behrmann in Munich at [email protected], Christoph Rauwald in Frankfurt at [email protected]
To contact the makers of this story: Anthony Palazzo at [email protected], Craig Trudell
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