The famous German automaker Volkswagen teased everyone when it said it would change its trade name in the United States to “Volstwagen,” to reaffirm its intention to orient its production in the future of electric cars.
“We might be changing out our K for a T, but what we aren’t changing is this brand’s commitment to making best-in-class vehicles for drivers and people everywhere,” said Scott Keogh, the company’s CEO in the U.S.
Although the announcement took many by surprise, Volkswagen later confirmed that it was an April Fool’s joke. Apparently, the prank had an effect, as the market fell roundly and after the announcement of the prank, the shares of the Volkswagen group rose 5% in the stock market.
Despite the fact that Volkswagen teased everyone, the company did not fail to attract attention, as many claim that the German automaker will be the new Tesla and, indeed, the company is making efforts to dethrone Elon Musk’s giant as the leading manufacturer of ‘Electric Vehicles’ (EV) in the United States.
Volkswagen fooled everyone but its attempt to become the largest e-vehicle maker is serious
In March, Volkswagen Group shares rose 30% in a single day, the highest increase in value seen by the company since 2008. The reason: the market expects the group to be one of Tesla’s fiercest competitors in the coming years.
Volkswagen aims to sell one million Ev’s by 2021 and expects to become the global leader in the electric car market by 2025. According to the company by 2030, Volkswagen’s sales will account for 60% of all-electric vehicle sales across Europe.
The company aims to have operating margins of 7% to 8% after 2021, Volkswagen also claims that by the end of 2021 it will have margins in the range of 5% to 6.5%; at present Tesla’s operating margins do not exceed 5%. Volkswagen aims to have higher profits through lower manufacturing costs, where it aims to save more than two billion euros by 2023.
Volkswagen Group CEO Herbert Diess said in an interview with CNBC: “This period is probably the most crucial for the whole industry. Within the next 15 years we will see a total turnover of the industry. Electric cars are taking the lead and then software really becomes the core driver of the industry.”
The adoption of software to improve the experience for drivers, as well as data collection for the business, is crucial for Volkswagen as it competes with Tesla in the EV’s industry.
Tesla currently controls about 16% of the global EV market, followed by Volkswagen with 13% of sales, China’s SAIC motor with 9%, then the Renault-Nissan- Mitsubishi alliance with 7%, and finally the BMW group with 6% of the market.
Although Volkswagen teased everyone with an April’s fool joke its market proposition is no joke, and Tesla is facing a new competitor that aims to dethrone it as king of the electric vehicle industry. Will Volkswagen’s goal become a reality? Only time will tell, what is clear is that the more competition there is in this new market, the better it will be for consumers.