What will the debt-laden masses do to save the situation?

Recently, an overseas media report of 400 billion euros in debt has received a lot of attention, especially this article was replied by Musk, the head of Tesla, and bluntly said that "a big reckoning is coming." ”

Automotive is a capital-intensive industry. Especially for Volkswagen, which is now actively seeking to transform, the high level of debt is not unexpected. It's just that this figure of 400 billion euros has greatly exceeded expectations.

After all, the GDP of European countries such as Belgium and Portugal is probably around this data.

Electric vehicle sales are key

For Volkswagen, as long as its terminal sales remain at the current level, no significant decline will occur; At the same time, the Volkswagen Group achieves stable profits every year, and the debt of the entire Volkswagen Group will still be in a controllable state.

In this case, investors will still believe in the public's ability to repay debts, banks will not lend to the public, and the entire capital chain of the public can operate stably.

However, for multinational car giants such as Volkswagen, the transformation of intelligent electric vehicles will become a relatively large uncertainty.

High debt will affect the large amount of money that Volkswagen will need to invest in the transition to smart electric vehicles. Volkswagen has invested a lot of money in the field of smart electric vehicles so far, but there is still a relatively obvious gap in the construction of many underlying core capabilities, compared with Tesla's benchmark.

Therefore, Volkswagen has successively cooperated with Horizon, Xpeng and Zhiji in the domestic market to introduce the technology of these companies to make up for their shortcomings. At the headquarters in Germany, including Bosch and Mobileye, they have also been included in the circle of core suppliers for joint development.

In the future, the success of Volkswagen's transformation will directly determine its credibility in the entire interbank market.

China-Europe trade will become the largest black swan

For Volkswagen, another unpredictable is the EU's investigation into subsidies for China's export of electric vehicles. Although Volkswagen's domestic import car business is not large, considering the high profit margin of the import car business, and the current profit situation of Volkswagen's two domestic joint venture car companies is not optimistic, the profit of imported cars is not optional.

The previous difficulties caused by geopolitical factors in the domestic market of Japanese and Korean brands will be likely to repeat themselves in the entire German system, including the Volkswagen brand.

The drive of the two major markets of China and Europe is the key to securing VW sales. As the second largest car company in Europe, Stellantis is a strong supporter of promoting the entry threshold of Chinese electric vehicles into the European market due to its average sales in the domestic market.

In the next step, how German car companies and the German government behind them wrestle with the European Commission will also be interesting.

Tesla's opportunity

Musk has always been known in the industry for speaking out. And he would have such an emotion for this blog post, from his point of view, it is not unreasonable.

Take Volkswagen, Toyota, and General Motors as examples, which are still using traditional methods to build complete vehicles. The model of building electric vehicles is not fundamentally different from the previous model of building fuel vehicles. By creating a pure electric vehicle platform and integrating various suppliers, we will introduce complete vehicle models to the market.

Different from the era of traditional fuel vehicles, these traditional car companies will be more involved in the self-research of core component systems including batteries, automatic driving, and intelligent cockpits. However, if there is no self-research success, they will also introduce third-party suppliers to provide services.

And this model, in Musk's view, is a backward model. His own definition of the future of the automotive industry is AI+Robotics.

In the field of autonomous driving, the consequences are unimaginable without AI. According to the current research and development ideas of automatic driving, we may never be able to wait for the real landing of L4 autonomous driving technology.

Because during driving, there will always be various long-tail conditions that could not be predicted before. Once there is a long-tail condition, the autonomous driving software platform based on this hundreds of millions of lines of code is likely to be unable to make correct judgments and has to rely on the intervention of the driver.

But in Musk's FSD Beta V12 broadcast not long ago, its code was just over 2,000 lines. And in this latest set of FSD software, Tesla makes full use of AI technology to fully verify how this algorithm reacts to scenarios that it has not encountered.

As for robots, the potential is just as great. Once Tesla's humanoid robot technology is more mature, then the majority of operators employed by vehicle companies can actually be replaced by robots. Labor union controversy aside, manufacturing costs for vehicle manufacturers will fall sharply. If the robot can be competent for the work of the vehicle company, it proves that it can also be applied to most other scenarios.

Perhaps in Musk's view, Volkswagen, which is heavily indebted, has not yet begun to transform into the field of AI and robotics, and it is not a smart strategy to carry the MEB platform or the future SSP platform electric vehicle according to the past model.