Massive Electric Vehicle Growth, VW: Unhealthy EV Competition

VW ID.4. (Doc. Volkswagen Group)

JAKARTA - Currently, automotive manufacturers are actively releasing the latest models that use electricity with the aim of reducing carbon emissions and achieving carbon neutrality.

One of the manufacturers that started switching to electric cars was Volkswagen. This German manufacturer has been a pioneer in assembling electric cars over the past few years.

Volkswagen has launched several electric car models such as ID.3, ID.4, ID.5, ID.6, and most recently, ID.7. They also plan to launch more electric car models by 2035 when these manufacturers are fully focused on electric car production.

However, the rapid development in electric cars was not well received by some in Volkswagen. Ralf Brandstatter, CEO of Volkswagen China, recently expressed concern over the growth of the electric car market which requires high capital investment and discounts that could harm consumers. He also called the competition in this segment very tight.

Brandstatter stated that more than 100 car brands around the world have produced and launched new electric cars by 2023, making the competition very fierce. In addition, the price of batteries for electric cars is still quite high.

"Strict competition and high battery prices provide heavy economic pressure. The success of short-term sales requires enormous capital investment," Brandstatter was quoted as saying by Autocar on Thursday, July 6.

He also added that many companies that have just entered the electric car market in recent years have been out or will soon leave this market. To survive, new capital investment is needed. In addition, many companies are also facing financial pressure.

The former head of Volkswagen also criticized the discounts given on China's electric car market. According to him, this could be detrimental to consumers.

"They will not get services from brands that are no longer operating or they may see significant price cuts in the models they buy," Brandstatter said.

The comments by China's Volkswagen CEO can also be seen as a covert criticism of its rival, Tesla, which has provided massive discounts on its model in the Chinese market. Brandstatter stated that Volkswagen would not compete in unhealthy ways to win sales and growth of the electric car market in China.

"For us, business benefits are the most important. We will not be involved in unfair market competition to achieve short-term delivery growth," he stressed.