Fighting Talk in the EV Market

Fighting talk in the EV market
Fighting talk in the EV market

Just last week we saw Volkswagen state that the company is looking towards the electric vehicle market for the future and aims to be number one by 2018. While this is not exactly from a standing start, as the company has limited exposure to the EV market at the moment, the company is nowhere near the likes of Renault-Nissan in terms of EV market share. However, it has prompted Renault-Nissan boss Carlos Ghosn to welcome the challenge from Volkswagen and could herald significant competition in the longer term.

Renault-Nissan also confirmed that the company believes 10% of all vehicles sold in 2020 will be electric vehicles as the industry continues to move forward. So who will be the major winners?

Is competition good?

While this may seem something of a bizarre comment, the fact is that the electric vehicle market today is not as well developed as it will be in 10 years, 20 years, etc. If we see too much competition, based around relatively small EV sales, this could well impact upon short to medium-term investment in the industry at a time when perhaps more investment is needed.

Quote from : "Tesla seems to be dominating the EV market at the moment. Who is the biggest threat to Tesla in the future?"

Whether or not the comments attributed to Volkswagen and Renault-Nissan are simply a means of grabbing the headlines and promoting the electric vehicle market is debatable but too much competition at this early stage could be detrimental in the medium to long term.

Renault-Nissan targets China

One interesting element of the response by Renault-Nissan was the reference to China and the fact that many believe the Chinese authorities will be the key to the EV industry going forward. There is no doubt that the Chinese authorities are very supportive, both physically and financially, of the industry although perhaps we need to see more publicity and more financial incentives to encourage greater take-up in China.

While Volkswagen would have you believe that it will trample over all competitors to be number one in the industry by 2018, perhaps the greatest challenge could be between China and the U.S. There is no doubt that U.S. EV manufacturers, such as Tesla, believe that the U.S. automobile industry will be the key going forward but the Chinese authorities are also determined to grab a significant market share.

U.S. EV sector continues to grow

While in many ways the U.S. electric vehicle sector is the focal point of the industry at this moment in time it may well be that the Chinese authorities will learn from U.S. government and U.S. manufacturer mistakes. There is no doubt that mistakes have been made within the U.S. electric vehicle industry (other governments are also guilty of holding back the industry) but in financial terms it seems as though the Chinese government is more organised and more focused.

It is no surprise to learn that the Chinese government has been behind a number of Chinese investments in the U.S. EV industry with a number of financially challenged U.S companies falling under Chinese control. This is something which has caught the attention of the U.S. authorities and would seem to indicate that the greatest competition will not be between individual companies but between individual countries.