Volkswagen Group China CEO Ralf Brandstaetter, who beforehand served as CEO of the Volkswagen Passenger Automobiles model, has warned that the electrical automobile market is “overheating.”
Talking on the 2023 China Vehicle Discussion board hosted by the China Affiliation of Vehicle Producers in Shanghai, Brandstaetter mentioned that prime capital funding and discounting “will in the end hurt the pursuits of shoppers,” based on Autocar.
“At the moment, there are greater than 120 automobile makers throughout the [electric vehicle] market, and about 150 new fashions can be launched in 2023. Intense market competitors and excessive battery costs make them face extreme financial strain. Quick-term gross sales success requires extraordinarily excessive capital funding.”
He additionally famous that many EV startups face a monetary squeeze and are exiting or about to exit the market, or are in pressing want of latest capital funding.
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“We face a state of affairs the place the market is overheating. Consolidation of the enjoying subject is in full swing,” the manager added. He was particularly crucial of the discounting of EVs in China.
“The fierce competitors has led to deep worth reductions in current months. This can in the end hurt the pursuits of shoppers. They’ll not be capable of get providers from retired manufacturers, or they’ll see a major worth reduce on the fashions they purchase.”
The feedback are clearly a reference to Tesla, which has began an EV worth warfare in China in late 2022 – and never solely in China. Brandstaetter burdened the Volkswagen Group wouldn’t chase gross sales and development in China’s EV market in any respect prices as “the profitability of the enterprise is crucial.”
“We won’t have interaction in unhealthy market competitors as a way to obtain short-term supply development,” Brandstaetter mentioned taking one other jab at Tesla, which has reduce costs many occasions this yr to extend gross sales.
The chief additionally famous that Volkswagen Group wouldn’t abandon the inner combustion engine automobile market in China regardless of slowing gross sales. He mentioned the carmaker would launch a complete of 17 new ICE fashions in China by 2030, along with selling the event of hybrid expertise and “regularly reworking petrol fashions to plug-in hybrids.”