This article is reproduced from the Autocarweekly account.
Author: Wild Chen
In the business world, there are no eternal enemies nor eternal friends, and this statement couldn’t be more fitting to describe the relationship between Diess and Musk.
It’s like the kind of relationship that is always quarreling and then being sweet again, but still complaining to your girlfriends about your boyfriend or girlfriend in the chat room. Love can turn into hate when it goes too far, and it is natural to be jealous when the love is so strong.
The unluckiest person in 2019 was Li Bin, and the protagonist of today was crowned as the hardest person of 2020 after a two-level reversal. He is Herbert Diess, the head of Volkswagen Group, a golden saint who almost lost his position because of his radical promotion of electrification.
The supervisory board turmoil was complex and intricate. In the reform that broke out in the absolute monarchy, it was a roller coaster to implore for dismissal, and the dangerous situation did not need to be explained. But the memorial letter that placed Diess’s desk on this execution ground was almost a death plea, full of his demands for the electrification revolution. In this lonely struggle, Musk is a sympathetic confidant.
Facing such a warm gesture from the other party, Musk also played along appropriately. In September last year, when Musk visited the under-construction Tesla German super factory, he specifically met with Diess and test drove the ID.3, and gave high praise afterwards.
It wasn’t until the end of the year that Diess won this difficult battle. At this time, the ID.3 had already achieved impressive market results in the European market, and the ID.4 was also about to be launched in China. However, due to the inability to connect to VPN, Volkswagen’s electrification process is still unknown in China.
But in the business world, there are no fathers or sons. When it is time to use it, friends come in handy.
On January 20th of this year, Diess stated in his first tweet that Volkswagen is catching up with Tesla in terms of market share, and the ID.3 and e-tron have won the battle for consumers in Europe.
More than a month later, the Financial Times reported that Diess had once again adjusted his statement, saying that Volkswagen will provide sufficient electric car battery supply for 1 million electric cars by 2023 and achieve profitability on the first electric car. Despite facing many unfavorable factors, Diess still believes that Volkswagen can fulfill its commitment to electrification and become a “fast follower” leading behind Tesla.In less than half a month, Volkswagen made a declaration on its first Power Day (which even sounds like a tribute to Tesla’s Battery Day) to surpass Tesla and become the industry leader by 2025.
From mutual flattery to careful probing, and then to a friendship breakdown in just half a year, the eternal truth in the commercial arena has been verified.
In the field of electric vehicles, Tesla is Volkswagen’s superior, and Volkswagen is Tesla’s inferior. This sentence could become the headline of many news articles and is similar to Laoganma, a well-known household brand in China, claiming to enter the milk tea industry and crush HEYTEA one day.
Although Volkswagen’s competitive target is clearly Tesla, CEO Keogh has stated that the company’s ID.4 electric SUV is targeting more traditional ICE vehicles such as Toyota’s RAV and Honda’s CRV. Previously, Volkswagen announced that the ID.4 electric SUV will start mass production in the US in September 2022 and plans to transform its factory outside Barcelona into an electric car factory, with the goal of producing over 500,000 electric cars annually.
It feels like an author using an innocent character, who has nothing to do with the matter, as a target when depicting a living room which obviously alludes to the love affairs between Lin Huiyin and Liang Sicheng. This can be considered as killing two birds with one stone, as modern yin-yang masters say.
Anyway, our attitude is not important. Capital response is the most honest.
On Power Day, Volkswagen released a battery and charging technology roadmap for the next decade. As a result, Volkswagen’s stock prices soared continuously. On March 16, Volkswagen rose 18% on the German stock exchange, the biggest increase since March 2020. On March 17, the rise even exceeded 16%.
This good news undoubtedly provided great encouragement for Volkswagen, which has been outpaced by young competitors like Toyota and Tesla for years. But is Volkswagen really competing against Tesla, who loves “trash-talking” and declaring to “crush” the whole world?
From the core content of Power Day, it can be seen that Volkswagen’s approach to electrification is straightforward, with a focus on batteries. The group revealed its battery and charging technology roadmap for the next decade to the outside world, with the aim of accelerating the transition from traditional fuel cars to electric cars by reducing its battery costs.According to the specific content presented by Power Day, Volkswagen’s electrification determination plans to establish six super battery factories with a total production capacity of 240 GWh/year by 2030. In addition, Volkswagen also expects to reduce the cost of entry-level model batteries by 50% and the cost of mass-produced model batteries by 30% through the application of innovative production technologies and continuous recycling.
At the same time, the company has also signed agreements with multiple European energy companies to deploy and operate 18,000 fast charging points by 2025. The company also plans to establish 3,500 fast charging points in the United States and 17,000 charging points in China through a joint venture with CAMS by 2025.
However, from the curve value of technological innovation, Tesla’s goal is to achieve an annual production of 3 terawatt-hours by 2030, which is 12.5 times that of Volkswagen’s. Some investment analysts of Ark Investment Management believe that “in an exponential world, linear-minded companies may be left behind.”
This statement clearly points to traditional manufacturing giant Volkswagen.
Whether the race of electric vehicles is electrification or intelligence is an eternal topic for discussion. Currently, in terms of single product strength, Volkswagen needs to work hard to catch up with Tesla in both aspects. However, from a macro perspective, the electrification race is not a narrow path with a finish line, it does not require mutual collision to surpass the red line.
In 2020, the total sales volume of China’s automobile market was 25.31 million, a year-on-year decrease of 1.9%. Among them, sales of new energy vehicles reached 1.367 million, a year-on-year increase of 11%. Therefore, it can be seen that the growth rate of new energy vehicles is excellent and the momentum is growing, but its sales ratio is still very low, only about 5.4%. This also means that the unknown territory of new energy is still vast, and there is no need to scramble in the blue ocean. This is not a relationship of competing growth rate, but seizing the opportunity to develop the incremental market and then fighting for the small balance of stock market- If we have to say it, at this moment, the opponent of electrification is the fuel market, not another like-minded partner.
Obviously, there are some things that only Tesla can do, and some things that only Volkswagen can do.
We can call it an empire-style revolution of electrification, which is a selfless revolution with a broader perspective.
Tesla can achieve the dominance of contemporary single-product technology and intelligence, but let’s narrow the window and stand at the height of history and geography. In the promotion of electrification, as a small-scale company, it can do very few things, but Volkswagen is different.
Scaling operations is exactly Volkswagen’s strength.
Along with the “Unified Cell” standard battery cell, Volkswagen also released its battery commercial loop. This includes battery cells, battery systems (Package), first-hand use (vehicles), second-hand use (energy storage), and battery recycling. But no matter which link it is, it cannot do without the four words “collaborative warfare”.
Solving the battery problem is a must-have problem for every new energy company, but solving the charging problem is a must-have problem for the entire new energy industry. Improving the current status of charging piles is an unaffordable cost for any new force. Even Tesla, which has patented design, only forms a monopolistic technological barrier, just like Type-C is still the lonely existence in the era when all interfaces were Android interfaces.
Volkswagen Group’s consideration is different. Its strategy is to achieve a perfect loop by relying on a strong supply chain and industrial chain in addition to its own construction. According to the plan, Volkswagen will cooperate with partners in Europe (Iberdrola, Enel, and BP), the United States (Electrify America), and China (CAMS, Kaimeisi) to build extremely large public charging piles. In addition to serving its own brands, all of them will be public charging piles. Although this business has a profit motive, it maximizes the improvement of the electric vehicle’s just-needed environment from an overall perspective.
Of course, Volkswagen’s ambition is not just to satisfy the home power environment. In the future, these energy storage-supported bidirectional charging boxes and electric vehicles will also become intelligent energy storage devices for industrial power and clean energy (wind/solar energy) through intelligent management systems. Finally, with reasonable energy management and intelligent energy storage systems, it will be a revolutionary leap from mobile data to WiFi-level.
In fact, Volkswagen’s goal is very simple, regardless of whether this is an intelligent or electrical era. No matter how, they only want to continue their day and night dream without any purpose.
To stop Tesla, Volkswagen doesn’t need to become Apple. It is enough to let this era’s Nokia survive.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.