Can Volkswagen take on Tesla?

Putting the past behind Volkswagen

It is unclear whether Volkswagen is looking to focus on battery-powered vehicles to put the 2015 diesel emissions scandal behind it or whether indeed the company sees its long-term future in electric cars. Let’s not forget this is a company that was caught up in a serious scandal the financial ramifications of which have yet to be clarified. There were talks of the company struggling to survive although two years later it looks as though Volkswagen is back on its feet again and looking to the future.

Many people confuse the Volkswagen Group and the VW brand because the VW brand is only one of 12 brands within the Volkswagen Group. However, there is no doubt that the VW brand is the most powerful and would certainly give the company the best opportunity to crack the electric car market.

Challenging Tessa

Herbert Diess, the head of the VW brand, has been very vocal in his support of electric vehicles suggesting that “anything Tesla can do, we can surpass”. This is a very interesting challenge because Elon Musk is not a man to shy away from a direct challenge and no doubt he will have something to say in the short to medium term.

There is an ongoing debate as to whether traditional automobile company will find it easier to move into the electric car sector or start-up companies such as Tesla, which are entering the market with little or no baggage. The bottom line is that if Volkswagen Group and Tesla do decide to go head-to-head, this will create intense competition which is obviously of benefit to consumers. Whether Volkswagen Group can deliver on its promise of 1 million VW branded electric cars per year by 2025 is debatable as is Tesla’s target of 2020.

Cutting costs

At a time when Tesla is investing billions of dollars in battery technology, it seems as though Volkswagen Group is going in the opposite direction. The company has announced an array of plans to cut costs by 2020, improve margins and enhance productivity by 25%. These moves will apparently form the base for the company’s attack on the electric car market by 2025 and while it all looks good on paper, will Volkswagen Group be able to deliver?

There is no doubt that the electric car market is going from strength to strength and whether Volkswagen Group does eventually challenge Tesla or not, it has caught the attention of the press. Any publicity for the electric car market is good publicity at this moment in time because it will be volume sales which ensure the long-term profitability of companies such as Tesla. While much may hinge on the launch of the Tesla Model 3 this summer, you always get the impression that Elon Musk has something else up his sleeve.