Volkswagen Group China CEO Says EV Market Is "Overheating"

Volkswagen Group China CEO Ralf Brandstaetter, who beforehand served as CEO of the Volkswagen Passenger Automobiles model, has warned that the electrical automobile market is “overheating.” 

Talking on the 2023 China Car Discussion board hosted by the China Affiliation of Car Producers in Shanghai, Brandstaetter mentioned that prime capital funding and discounting “will in the end hurt the pursuits of shoppers,” in line with Autocar.

“Presently, there are greater than 120 automobile makers inside the [electric vehicle] market, and about 150 new fashions will probably be launched in 2023. Intense market competitors and excessive battery costs make them face extreme financial stress. Brief-term gross sales success requires extraordinarily excessive capital funding.”

He additionally famous that many EV startups face a monetary squeeze and are exiting or about to exit the market, or are in pressing want of recent capital funding.

“We face a scenario the place the market is overheating. Consolidation of the taking part in area is in full swing,” the manager added. He was particularly important of the discounting of EVs in China.

“The fierce competitors has led to deep value reductions in current months. This can in the end hurt the pursuits of shoppers. They are going to not have the ability to get providers from retired manufacturers, or they are going to see a major value reduce on the fashions they purchase.”

The feedback are clearly a reference to Tesla, which has began an EV value conflict in China in late 2022 – and never solely in China. Brandstaetter pressured the Volkswagen Group wouldn’t chase gross sales and development in China’s EV market in any respect prices as “the profitability of the enterprise is an important.”

We is not going to interact in unhealthy market competitors in an effort to obtain short-term supply development,” Brandstaetter mentioned taking one other jab at Tesla, which has reduce costs many occasions this 12 months to extend gross sales.

The manager additionally famous that Volkswagen Group wouldn’t abandon the interior combustion engine automobile market in China regardless of slowing gross sales. He mentioned the carmaker would launch a complete of 17 new ICE fashions in China by 2030, along with selling the event of hybrid know-how and “step by step reworking petrol fashions to plug-in hybrids.”