Advertisement
Electric & new energy vehicles
BusinessCompanies

VW and Mercedes’ electric-car ambitions run into trouble forcing the German firms to re-evaluate strategies

  • New VW CEO Oliver Blume is re-evaluating the strategies set out by former CEO Herbert Diess after a number of setbacks
  • Mercedes’ struggles with its top-of-the-line EV model in China could set back plans to go all-electric in key markets by 2030

Reading Time:3 minutes
Why you can trust SCMP
2
Mercedes cut the price of its EQS electric car in Shanghai amid slow uptake. Photo: Reuters
Bloomberg
The German car industry’s bid to wrest the electric-vehicle crown from Tesla veered off course this week with stumbles for Volkswagen and Mercedes-Benz.
Advertisement
VW plans to delay a key project by at least two years after software fumbles, according to a person familiar with the situation, calling into question its ambitious €52 billion (US$54 billion) EV roll-out touted as the industry’s biggest. Also this week, Mercedes cut prices of its flagship EQS EV in China by about US$33,000 after misjudging the market. The shares fell as much as 7.2 per cent.

The developments are a red flag for the industry that is pouring unprecedented funds into the transition with ambitious timelines. While carmakers the world over grapple with the switch away from combustion engines, the stakes are highest for Germany’s manufacturers accustomed to commanding a premium based on cutting edge technology and luxurious trims.

“German automakers have announced bold electrification targets and claim they’re leading the transition, but they’re not yet delivering,” said Bloomberg Intelligence’s Michael Dean. “They still have a long way to go.”

01:31

Speeding Tesla kills 2 in China, carmaker denies claims that brakes failed

Speeding Tesla kills 2 in China, carmaker denies claims that brakes failed

After years of failed attempts to displace Tesla and with Chinese upstarts prepping their own moves, German carmakers have switched gears to win the EV race, moving away from making incremental changes to their combustion-engine cars that have dominated for decades.

Advertisement

BMW, Mercedes and VW are pouring more than €100 billion into scaling up an entirely new infrastructure of assembly platforms, battery plants and software to deliver a new generation of EVs. The hope is that these will lead on driving range as well as digital offerings that tap new sources of revenue and shut out tech rivals.

loading
Advertisement