Written by / Zhu Lin
Editor/ Wu Jing
Design / Shi Yuchao
Source/Autonews, by Bloomberg Staff
Who will control the future of the automotive industry? This question is becoming more and more interesting.
As a pioneer and leader in the automotive industry in the new energy era, Tesla has dominated in the early days, broadening the imagination of investors with the vision of the next generation of cars and occupying the nascent pure electric vehicle market.
On the other side are the giants of large-scale car production, Volkswagen and Toyota. They sell ten times as many as Tesla — in 2021, elon Musk will sell about 10 to 11 for every car he sells. The world's two largest automakers realize that the era of electric vehicles has arrived, and they are considering how to stay ahead.
In December 2021, the automakers unveiled plans for the coming years in five days, spending a total of $170 billion to maintain their decades-long dominance in the industry.
The top executives at these companies are well aware that the transition from an internal combustion engine to electrification won't be orderly — just as Apple entered the mobile phone market and overtook Nokia, which once dominated.
After a year of significant growth, Tesla became the most valuable automaker of all time, and the trillion-dollar company now faces the question of whether Musk's advantage will remain as insurmountable as his company's market capitalization suggests as it enters the next era of car manufacturing.
Andy Palmer, former CEO of Aston Martin and former Nissan executive, said: "When the two largest car companies in the world decide to bet on electric vehicles, it is no longer a question to be doubted – mainstream cars are shifting to electric vehicles." ”
Palmer is often referred to as the "godfather of electric vehicles" because he played an important role in the development of Nissan's pure electric vehicle, the Leaf. "I expect the shift to electric vehicles to be faster than everyone expected," he said. ”
The way Volkswagen and Toyota defend their turf is very different from what one would expect from the two proud German and Japanese industrial giants. Volkswagen began to fight back with all its might, seeing Tesla as its biggest rival. Toyota has invested heavily in electric vehicles while continuing to diversify its bets, waiting for opportunities in the early stages of the revolution.
Toyota: Multi-faceted bets
A few months ago, on a racing track in the mountains of western Japan, Toyota demonstrated its long-term positioning for the future. While Toyota brought in a battery-powered bZ4X electric SUV, Akio Toyoda was driving a Corolla Sport H2 concept car on the track with a hydrogen-fueled engine.
At a press conference on November 13, 2021, Akio Toyoda said: "In the face of uncertainty, what we need is diversified solutions. We don't want to tie ourselves to a choice. ”
On December 12, 2021, Toyota CEO Akio Toyoda announced the company's future electric vehicles
Diversity is one thing, absence is another. The hybrid systems pioneer known as the Prius admits it was "a bit late" when it launched its all-electric model four years ago. Toyota's first electric vehicle for the global mass market is not expected to hit the market until mid-2022.
But weeks after driving a hydrogen-fueled car to a time trial, Akio Toyoda changed into a suit and tie, giving the outside world an unprecedented glimpse of a range of futuristic products. At a media briefing on an artificial island in Tokyo Bay, when the first curtain was unveiled, five electric cars were parked on either side of him.
Akio Toyoda gave a brief sales pitch for each car, then raised his palm to the sky, followed by another curtain revealing 11 electric cars. "Welcome to our future showrooms," he said, and announced plans to launch 30 electric vehicles by 2030.
During this period, Toyota will invest 8 trillion yen in electrification, half of which will go to pure electric models. The automaker's goal is to sell 3.5 million electric vehicles a year by 2030, which is almost double the target set seven months ago.
Toyota took a lot of encouragement to get to this point. Some investors and environmental groups have criticized the automaker for being slow to act, and executives' cautious remarks run counter to the auto industry's general enthusiasm for electric vehicles.
In the summer of 2021, Anders Schelde, chief investment officer at AkademikerPension, a Danish pension fund company that owns Toyota stock, said he didn't see management's approach to electric vehicles as a strategy that would allow the company to win in the long run.
Schilder said Danish pension fund companies are beginning to look at their investments from a larger perspective to ensure they meet the goals of the Paris Agreement. The Paris Agreement establishes a framework for limiting global warming to well below 2 degrees Celsius. Schellder said in an interview, "Toyota has two or three years to sort out their actions. ”
This type of criticism is a pain point for Toyota, and at executive meetings, there was a debate about why Toyota's carbon neutral message was not well answered.
The Electric Vehicle Event in Tokyo in December was the latest in a series of celebrations the company held around the world, trying to convey the nuances of its loyalty to hybrids and hope that the hydrogen-powered vehicles it has invested in years of research and investment will gain traction alongside pure electric vehicles that run on batteries alone.
In early December, Toyota pledged in Brussels that it would only sell zero-emission vehicles in Europe by 2035. A few days later, at a news conference in North Carolina, the company hosted the governor and hundreds of other guests, announcing that it would build the first battery factory in the united states with an investment of $1.29 billion.
VOLKSWAGEN: All-out counterattack
It was the Volkswagen Group that launched an all-out attack on Musk. The group has been growing for 84 years, has 12 brands, manufactures cars in about 120 locations around the world, and employs more people than Detroit's total population.
The Volkswagen Group produces an annual output of approximately $280 billion and produces models under the Volkswagen brand, the Tiguan and Passats, as well as Porsche Sports, Lamborghini Supercars and Scania Heavy Trucks.
Sales of the Taycan EV of the Porsche brand of the Volkswagen Group are expected to surpass sales of its iconic 911 sports car▼
Every year CEO Herbert Diess is at the helm, Volkswagen has announced an unmatched electrification budget. On December 9, 2021, Diess unveiled one of his biggest plans to date, which will allocate 89 billion euros over the next five years for electric vehicles and software development.
Dees often used Musk as a yardstick to the point where he admitted to annoying some people within Volkswagen. In October 2021, at an executive conference attended by 200 Volkswagen executives, he unexpectedly invited Musk as a guest.
Volkswagen's initial foray into the electric vehicle market was through the introduction of luxury models such as the Audi e-tron and Porsche Taycan. In 2021, the company launched the ID3 hatchback and the ID4 SUV in an attempt to make a splash with more mainstream models.
At Power Day in March 2021, Dies said, "Our transformation will be very rapid, greater than the industry transformation of the past century." "Power Day" is a Volkswagen-like Tesla "Battery Day" style event.
In the 10 months since heading into 2021, Volkswagen has delivered about 322,000 all-electric vehicles, just over half of its sales target of 600,000 vehicles.
Analysts at Stanford Bernstein expect Volkswagen to sell about 450,000 electric vehicles for the full year of 2021, which is "not the end of the world, but also not a reason to celebrate."
Dees wasn't intimidated. By the end of 2022, the shared architecture of ID.3 and ID.4 will support 27 electric vehicles. Volkswagen will produce the models at five plants in Germany, China and the Czech Republic, and later eight, starting production at two plants in the U.S. and a U.S. assembly plant in Chattanooga, Tennessee.
Volkswagen's luxury electric vehicles have also achieved good results. Take the electric sports car Taycan, for example, which is expected to sell more than Porsche's iconic 911 sports car. In addition, Porsche will continue to launch more electric models, and the brand expects to launch a purely electric version of the popular Macan SUV in 2023.
Tesla: Chasing after the winner
While Toyota's onslaught deserves serious attention, Volkswagen's beginnings with electric vehicles suggest that the transition to electric vehicles won't be as simple as pushing a switch.
Tesla is also doing its own expansion. The company delivered more than 936,000 vehicles at the end of the previous year, and production rose nearly 90 percent. It plans to invest as much as 1.2 billion yuan in its two-year-old Shanghai plant to upgrade equipment and bring production beyond its stated capacity of 450,000 vehicles per year. It will add another 4,000 workers to the plant, bringing the total number to about 19,000.
Two new assembly plants (one outside Berlin and the other in Austin, Texas) are also preparing to start producing the Model Y, and there is enough demand to meet all this extra output. Martin Viecha, Tesla's head of investor relations, recently said at a deutsche bank conference that the waiting time for the Model 3 and Model 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 outpacing the industry's production capacity, the success of electric vehicles no longer depends on orders, but on capacity, the ability to secure supply and the best cost, and Tesla believes it has a considerable lead in this regard." ”
Others argue that Tesla will be toppled from the electric car throne as new entrants 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.
"The huge investment will put Toyota and Volkswagen in a better position to compete with electric vehicle experts." Anna-Marie Baisden, head of automotive research at Fitch, said, "We have always believed that more traditional automakers will have certain advantages over start-ups, such as scale, manufacturing experience and brand loyalty. ”
In addition to changing assembly lines and model offerings, Volkswagen and Toyota must also catch up with Tesla in another way: software.
In the early sales of ID.3, Volkswagen was hampered by some challenges in implementing certain technical functions. The first cars delivered to customers lacked features, including the ability to connect smartphone apps to car displays. Unlike the way Apple has done to the iPhone and Tesla to its models, Volkswagen can't send fixes to its owners via OTAs, and ID.3 drivers have to go to dealers to receive an after-sales service.
The experience of Joey Mandel is a prime example. The festival worker, from the Woodland Hills neighborhood of Los Angeles, was the first to purchase an ID.4 electric SUV from a local dealership. He also ran into the car's problem — the audio was periodically interrupted and sometimes the car couldn't be released from the charging plug.
Still, Mandel says that overall, he's still happy with his purchase. Thanks to Volkswagen's "reliable and well-established" charging network, he had no trouble attending events on the West Coast.
"In terms of technology, it's not Tesla, but for those who think they're afraid of the transition to electric vehicles, Volkswagen's products are relatively like regular cars," Mandel said. ”