German automotive giant Volkswagen will become the largest
manufacturer of EVs before 2030, according to new analysis
WoodMac expects Volkswagen to produce 14 million battery
electric vehicles (BEVs) cumulatively by 2028, and climb from its
2018 ranking as the 10th largest manufacturer to the very top of
the global pile.
VW’s own internal target is to produce 22 million BEVs by
2028. But that looks unrealistic, according to Ram Chandrasekaran,
principal analyst, Wood Mackenzie
Selling 22 million EVs would mean capturing 53 percent of the
global BEV market share out to 2028, according to WoodMac’s base
case scenario. “The company would also need to secure 57 percent of
all EV battery pack production, something that would prove to be
extremely challenging,” said Ram Chandrasekaran, principal
analyst, Wood Mackenzie.
The 14 million figure is based on VW’s own plans and
production capacity, and anticipated incremental improvements.
While short of VW’s own goal, it would still represent a very
healthy 27 percent share of the global market.
Even at the projected 27 percent market share, VW would need
access to three-tenths of the world’s EV battery cell
VW has a number of supply contractsin place today, including a
lithium supply deal with Ganfeng, and cell supply deals with
Samsung SDI, LG Chem, SK Innovation and CATL, Chandrasekaran noted.
Most recently, VW invested $1 billion in Northvolt, a Swedish
“However, there have been issues with some of these companies,
therefore threatening VW’s targets,” Chandrasekaran said.
Competition from Elon Musk
In a separate piece of research, WoodMac said it expects Tesla
to sell six million BEVs between 2018 and 2028. But Tesla could
supercharge its efforts if it released an entry-level vehicle
around the $25,000 mark, potentially hitting 8 million during the
Tesla has said it wants 1 percent of all global car sales, not
just BEVs, but Chandrasekaran said the company would need to
broaden its offering to get there, including the possible launch of
an entry-level car.
“Interesting to note, the most “traded-in” car for a Model 3
is a Toyota Prius—which is incidentally priced at $24,200,”
said Chandrasekaran. The release of an entry level car could see
Tesla reach that one percent goal as early as 2024.
Analyst upgrades and progress with its factory in China have
seen Tesla’s share price pass $500 for
the first time, even though it did not turn a profit in 2019.
“Tesla appears to be in a strong position,” said
“The company has secured $1.6 billion [of] financing from
state-backed lenders at interest rates lower than the People’s Bank
of China’s market rate. It also has in-principal contracts with
LG-Chem and CATL to supply battery packs for its new factory.”
Pilot production at its new China factory location has begun and
mass production is expected this year, doubling the production
capacity of the Model 3 in the process.
Land has been acquired for a third Tesla manufacturing site,
expected to be in Berlin.
The diversified base of factories will help soften any impact
from the ongoing trade wars, said Chandrasekaran.
Source: FS – GreenTech Media
WoodMac: Volkswagen Will Be World’s Biggest Electric Car Maker By 2030