Currently, as a pioneer and frontrunner, Tesla Corporation (TSLA. US) dominated the early days of the new energy era, capturing investors' imagination with its vision of the appearance of next-generation cars and capturing the nascent all-electric vehicle market.
Volkswagen and Toyota Motor (TM. US) the two world's largest automakers realize that the era of electric vehicles has arrived, and they are exploring how to stay ahead of the curve.
Last month, the automakers laid out plans to invest a fortune of $170 billion over the next few years to preserve their positions at the forefront of the industry they have dominated for decades.
The top executives at these companies are well aware that the transition from the internal combustion engine to the battery will not be orderly, and the process will be very intense — similar to Apple(AAPL. US) entered the mobile phone market, surpassing Nokia (NOK. US)。
Snipe Tesla
After a year of significant growth, Tesla became the most valuable automaker of all time. But the question for the trillion-dollar company is whether its advantages are as insurmountable as its market capitalization suggests as it enters the next generation of auto manufacturing.
Andy Palmer, former CEO of Aston Martin and former executive at Nissan Motors, said: "When the two largest car companies in the world decided to invest entirely in electric vehicles, there was no suspense – electric vehicles are becoming mainstream. I expect the industry's transition to electric vehicles to be faster than everyone expected. ”
Volkswagen and Toyota have very different ways of defending their market share. Volkswagen is targeting Tesla for a fierce catch-up, while Toyota continues to push for hydrogen-powered vehicles and invests heavily in electric vehicles, waiting for the end of the early stages of the electric vehicle revolution.
Volkswagen: Learn from your opponents
The giant that competes most with Musk is Volkswagen, which has grown over the past 84 years with 12 brands and produces cars in about 120 locations around the world. Volkswagen Group produces about $280 billion worth of models such as tiguan, passat, Lamborghini supercar and Scania heavy-duty trucks each year.
During each year that Herbert Diess was at the helm of Volkswagen as CEO, Volkswagen announced an over-electrification budget. On December 9 last year, Diess unveiled one of its biggest plans to date, allocating 89 billion euros ($100 billion) over the next five years for electric vehicles and software development.
Diess often uses Musk as a yardstick. Last October, at an executive meeting attended by 200 company executives, he unexpectedly invited Musk to attend.
Volkswagen initially entered the electric vehicle market with the introduction of luxury models such as the Audi e-tron and Porsche Taycan. Last year, the company tried to compete with more mainstream models, the ID.3 hatchback and ID.4 SUVs.
In the first 10 months of 2021, Volkswagen has delivered about 322,000 all-electric vehicles, only more than half of its sales target of 600,000 vehicles. Analysts at Sanford C. Bernstein & Co. expect Volkswagen to sell about 450,000 electric cars this year, which is "not the end of the world, but also not a reason to celebrate."
Still, Diess wasn't intimidated. By the end of this year, the shared architecture of ID.3 and ID.4 will be used for 27 electric vehicles. Volkswagen will increase production from five plants that originally produced these models to eight, starting production at two more plants in the United States and an assembly plant in Chattanooga, Tennessee.
Volkswagen's high-value electric vehicles have also achieved good results. For example, sales of the Porsche Pure Electric Sports Car Taycan are expected to surpass its iconic 911 sports car. Porsche will also launch more electric models, and the brand expects to launch an all-electric version of the Macan SUV next year.
Toyota: Eat the old book, carry the weight forward
A few months ago, Toyota demonstrated its long-term positioning for the future at a press conference in Japan. This time, although Toyota Motor Corporation launched a pure electric bZ4X SUV, the company will focus on the GR Yaris H2 hydrogen-powered concept car at the meeting.
Although new energy has become a major trend, Toyota, as a giant in the global automotive industry, did not put too much emphasis on electric energy in its previous planning, but on the development of hybrid and its hydrogen energy, and Toyota is only the leader of hydrogen energy.
Akio Toyoda, grandson of Toyota's founder, said at a news conference on November 13: "In the face of uncertainty, what we need is a diversified solution. We don't want to tie ourselves to a choice. ”
Diversity is one thing; Whether there is or not is another matter. Toyota, once known for its Prius hybrid system, admitted four years ago that it was "a bit late" to launch an all-electric model. Toyota's first electric vehicle for the global market is not expected to hit the market until the middle of this year. At the above-mentioned press conference, Akio Toyoda announced plans to launch 30 electric vehicles by 2030.
By 2030, half of Toyota's 8 trillion yen ($70 billion) investment in electrification will go to all-electric models. Toyota's goal is to sell 3.5 million electric vehicles a year by 2030, nearly double the target set seven months ago.
Toyota motors have been spurred to this point. Some investors and environmental groups have criticized the automaker for being slow to act, and the cautious remarks of executives contradict the auto industry's enthusiastic pursuit of electric vehicles. Last summer, Anders Schelde, chief investment officer at AkademikerPension, a Danish pension fund that owns Toyota motor stock, said he didn't see management's approach to electric vehicles as conducive to a long-term winning strategy.
Schelde said his fund is starting to look at its investments more broadly to make sure they align with the vision of the Paris Agreement. The long-term goal of the Paris Agreement is to limit the increase in global average temperature to less than 2 degrees Celsius compared to pre-industrial times. Schelde said in an interview: "Toyota has two or three years to adjust its behavior."
This type of criticism is a pain point for Toyota; During the executive meeting, the company's management has been discussing why Toyota's message about carbon neutrality hasn't received a good response. The company's electric vehicle event in Tokyo last month was the latest in a series of events it held around the world to convey its loyalty and vision for hybrids — toyota's hope that hydrogen-powered vehicles that it has been researching and investing in for years will reap the benefits alongside pure electric vehicles.
In addition, in early December, Toyota motor in Brussels, Europe, promised to sell only zero-emission vehicles in Europe by 2035. A few days later, Toyota held a press conference in North Carolina, inviting the governor and hundreds of other guests to attend, announcing that it would invest $1.29 billion to build the first battery factory in the united country, scheduled to come on stream in 2025.
While Toyota's fierce investment deserves serious attention, Volkswagen's beginnings with the introduction of electric vehicles show that the transition to electric vehicles is not an easy task.
Tesla also did not slacken off
Tesla plans to invest 1.2 billion yuan ($188 million) in equipment upgrades at its Shanghai plant to bring production capacity above the established 450,000 units/year level. The plant will also add another 4,000 workers, bringing the total number of workers to about 19,000.
Tesla's two new assembly plants in Berlin and Texas are also preparing to start producing the Model Y. There is enough demand to meet all these additional outputs. Martin Viecha, Tesla's head of investor relations, recently said at a deutsche Bank conference that the delivery time for the Model 3 and Y has been extended to more than 6 months.
Deutsche Bank analyst Emmanuel Rosner said in a note: "With the market demand for electric vehicles clearly exceeding the industry's production capacity, the success of electric vehicles no longer depends on the number of orders, but on capacity, the ability to ensure supply and the optimal cost, and Tesla believes it has a considerable lead in this regard."
Others, though, argue that Tesla will be toppled from the electric car championship as upstarts make their way in this growing market. IHS Markit expects Tesla's ev market share in the U.S. to fall to 20 percent by 2025, from just over 50 percent today.
Anna-Marie Baisden, head of automotive research at Fitch International Consulting, said the huge investment "will put Toyota and Volkswagen in a better position to compete with electric vehicle specialty companies." Baisden notes: "We've always believed that more traditional automakers will have certain advantages over start-ups, such as scale, manufacturing experience, and brand loyalty."
But in addition to changing their production lines and model offerings, Volkswagen and Toyota must also catch up with Tesla in another way: software.
Early sales of the ID.3 were plagued by Volkswagen's technical features. The first cars delivered to customers lacked features, including the inability to connect smartphone apps to car displays. Unlike Apple and Tesla, which wirelessly send repair information to car owners, ID.3 owners must personally go to the dealer to receive repair services.
In terms of technology, Volkswagen is inferior to Tesla. But for those who think they don't dare switch to electric cars, Volkswagen's cars are relatively like "regular" cars.