VW Trying to Keep Up

VW Trying to Keep Up


Volkswagen is losing ground to Tesla in the race to dominate the electric vehicle market. The world's largest automaker announced on Wednesday that it will deliver 452,900 battery electric cars to consumers in 2021, nearly doubling its previous year's total. However, this was insufficient to keep up with Tesla, who delivered over 936,000 vehicles in 2021.

Last year, Tesla increased its deliveries by around 436,600 units, compared to a 220,900 increase for the Volkswagen Group, which owns brands such as Audi, Porsche, and Skoda.

To compete with Tesla, the German business has committed to spending more than $100 billion over the next five years to electrify its fleet. Volkswagen is already the top seller of electric cars in Europe, and by 2026, it plans to sell 25% of its vehicles as electric.

It has begun to roll out a number of new models, including the ID.4 electric SUV, but supply chain concerns delayed progress last year. VW Boss, Christian Dahlheim said, “2021 was very challenging due to global semiconductor shortages, but we nevertheless consistently implemented our clear future course. The doubling of our battery-electric volumes and the high demand for all our vehicles clearly show that we are on the right track."


Tesla Beating the Chip Shortage 

During the year, Tesla faced its own semiconductor shortages, which it was able to overcome. Elon Musk's business delivered 308,600 vehicles in the final three months of 2021, far above Wall Street expectations.

JB Straubel, former Tesla CTO

Tesla expects annual global sales growth of 50% or more for at least the next three years, thanks to new factories near Austin, Texas, and Berlin that will begin full-scale production in 2022.

Despite the fact that there are numerous competitors in the electric vehicle field, Tesla continues to dominate market share, as proven by its performance this quarter despite the chip shortage.

JB Straubel, co-founder of Tesla and founder and CEO of battery-recycling startup Redwood Materials, has both good and bad news for electric vehicle enthusiasts. Demand is increasing up, according to Straubel, but the auto industry isn't moving fast enough to keep up.

Straubel recently said, “This is catching people a bit off-guard. It’s a really strong shift. All the way from internal combustion sales dropping to EV sales increasing by almost 100% in different regions.”

According to Straubel, industry sales projections that EVs will account for 12.7 percent of all U.S. auto sales by 2025 may be overly conservative. If you look at how quickly adoption is expanding in sections of Europe and other areas of the world, I believe it will reach even greater percentages by the middle of the decade.

Redwood Materials is investing $1 billion in a new plant in McCarran, Nev., to meet that demand, he said. When it's finished later this year, the plant will generate anode copper foil, which will be utilised by Panasonic to make battery cells that will eventually be used in Tesla's Gigafactory in Nevada.

The plant, which will eventually employ more than 500 people, is expected to generate enough anode copper foil to supply 1 million electric vehicles each year, according to Redwood Materials. The company claims that its plant will be the first in the United States to produce anode copper foil, with the majority of the present supply coming from Asia, notably China and South Korea.

Meanwhile, lithium-ion battery manufacture is expected to keep up with EV vehicle production. According to AlixPartners, an automobile industry consulting firm, the global capacity for lithium-ion battery manufacture was 713 gigawatt hours last year. According to AlixPartners, by 2025, that amount will have more than tripled to 2,273 gigawatt hours, with EV battery output in the United States more than quadrupling.

With so much capacity coming online, common wisdom predicts that the cost of battery cells and battery packs will fall, lowering the price of EVs and increasing profit margins.