Volkswagen CEO Herbert Diess stated at the WEF that the company’s EV sales will overtake Tesla numbers in three years.
Volkswagen (ETR: VOW3) looks to supplant Tesla (NASDAQ: TSLA) as the world’s largest seller of electric vehicles by 2025. According to the German car manufacturer’s chief executive Herbert Diess speaking at the recent World Economic Forum (WEF) in Davos, Volkswagen will meet up and eventually overtake:
“Tesla currently is in the lead when it comes to EVs, probably also it is the most digital car company already and they have some advantages. We are still aiming at keeping up and probably overtaking by 2025 when it comes to sales.”
Further expounding on this goal, Diess also stated that Volkswagen would benefit greatly from solving supply chain constraints over the coming months. On why Tesla was the preferred choice among investors over other traditional automakers, including Volkswagen, Diess said “Markets are always about the future.”
Volkswagen to “Create Momentum” on Tesla in “Second Half of Year”
In addition, Diess also explained that Tesla operates a sound business model that lets it reap positive yields. However, the Volkswagen CEO doubled down on his belief that the company’s sales would catch up to that of Elon Musk-led Tesla. According to Diess, part of this is because Tesla is contending with the growing pains associated with expansion. The American automotive company has a new Gigafactory just outside Berlin in Germany, and plans to build another plant in Shanghai, China.
The way Diess sees it, these extra operational commitments will slow down Tesla’s production capacity at least for a while. On the flip side, this development will also open up the door for Volkswagen to pounce. Speaking to CNBC at the forum, Diess said:
“I think for Tesla, also, ramping up now will probably be a bit more challenging. They are opening up new plants and we are trying to keep up speed. We think in the second half of the year, we are going to create some momentum.”
Volkswagen stock changed hands around 0.9% lower during Tuesday’s pre-market trading session. This dip represented part of a sweeping decline in the automobile sector as seen on the pan-European Stoxx 600.
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Diess also spoke on the ongoing supply chain constraints first brought about by the coronavirus pandemic.
“I would say that we would see an alleviation of this situation towards mid-year and second half we should be in better shape — if the situation is not getting any worse, which I don’t think so,” said he.
In response to a question about clarity, Diess suggested that the semiconductor scarcity may not necessarily end this year. However, the Volkswagen boss emphasized that the situation will definitely get better. “I think supply chains are getting in order again,” he surmised.
The auto industry and the tech space have been grappling with shortages in semiconductor chips for two years now. These chips are crucial components that go into manufacturing finished products such as cars, computers, and mobile phones.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
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