Volkswagen, once the world's largest automaker, is currently grappling with a crisis across multiple markets. This is potentially the biggest crisis since the dieselgate scandal in 2015. Tesla and Chinese companies have quickly gained dominance in the electric vehicle (EV) space, leaving Volkswagen struggling to keep up. Despite being among the top three global EV manufacturers, Volkswagen is losing ground due to changing consumer sentiment and quality concerns related to their electric vehicles.
The company's CEO, Oliver Bloom, has acknowledged the quality issues and is apologizing for the previous management's oversight. Volkswagen is now facing the daunting challenge of needing to replace 10 million units just to maintain its status. The company has been slow to convert its fleet to electric, which is becoming a significant problem as roughly 40% of the company's overall sales come from China.
Volkswagen's transition to EVs is seen as a lot messier than it seems. The company is planning to deliver 10 new models between now and 2026, which adds even more overhead. Volkswagen is working on developing a platform that's at least a decade behind what Tesla has today. This adds to Volkswagen's long list of problems and raises questions about their ability to stage a turnaround.
In the face of this crisis, Volkswagen's China executive officer, Ralph Branstater, has stated that the race is a marathon, not a sprint. However, if there are too many mistakes being made, the company may not last long enough for it to even be a marathon. Elon Musk has also chimed in, suggesting a great reckoning is coming for large automakers who have enjoyed a happy oligopoly for multiple years, as the debt only works with strong and stable cash flows.
In summary, Volkswagen is currently facing a significant crisis in the EV market, with Tesla and Chinese companies quickly gaining dominance. The company's struggle to keep up, coupled with quality concerns and a slow transition to electric vehicles, has raised questions about its ability to recover.
1. Volkswagen, once the world's largest automaker by sales, is currently facing struggles across multiple markets and geographies, with Bloomberg describing it as potentially the biggest crisis since the dieselgate scandal in 2015 .
2. Tesla and Chinese companies have quickly moved to dominate the electric vehicle space, leaving Volkswagen struggling to keep up .
3. Volkswagen is still among the top three electric vehicle makers globally, but it is losing ground due to changing consumer sentiment and quality concerns with its electric vehicles .
4. Volkswagen's CEO, Oliver Bloom, is apologizing for the quality of the electric vehicles that have been shipped, admitting to thousands of problems with the vehicles .
5. Volkswagen's transition to electric vehicles is facing significant challenges, including the need to replace a staggering 10 million units just to maintain the status quo .
6. Volkswagen's stock has been crushed by 30 percent over the past year, with a market cap that's about 13 times less than Tesla's despite triple the revenue .
7. Electric vehicles account for 24% of new auto sales in China, which is shifting to electric vehicles faster than anywhere else in the world .
8. Volkswagen has been slow to convert its fleet to electric, which has become a huge problem since roughly 40% of the company's overall sales come from China .
9. Volkswagen admitted that the quality of its vehicles hasn't been up to par, and as a result of the new leadership change, they will now have more empathy for the consumers who've been disappointed with their vehicle purchases .
10. Volkswagen has a 10-point plan to try and redeem itself, but many of the firm's mistakes are now beginning to haunt them .
11. Volkswagen is still struggling with electric vehicles, not even mentioning software or autonomous driving .
12. Volkswagen believes that its immense resources will help to turn the company around, they've already invested hundreds of millions in Chinese firm ex-pung to try and gain further access to technology .
13. Volkswagen's massive cash resources are also countered with piles of debt and liabilities .
14. Volkswagen's transition to electric vehicles is evidently a lot messier than it seems, with the company speaking highly of its electric vehicle platforms all of which are still on the roadmap .
15. Volkswagen plans to deliver 10 new models between now and 2026, which adds even more overhead .
16. Volkswagen will launch the SSP architecture or scalable systems platform in 2026 to further complicate things .
17. Volkswagen is working on developing a platform that's at least a decade behind what Tesla has today .