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Does VW’s Global Manufacturing Capabilities Giving Them an Edge over Tesla?

August 8, 2017

Does VW’s Global Manufacturing Capabilities Giving Them an Edge over Tesla?

Although the Volkswagen Group continues to lick its wounds from their recent massive recall with TDI vehicles in the United States, the German automotive manufacturer appears to be flexing their muscles. Expected to introduce their first stand-alone battery powered vehicles in 2020, Volkswagen is looking to go toe-to-toe with Tesla in the ultra-competitive EV segment and believes their large-scale manufacturing capability gives them the potential to stop Tesla’s rise to power.

VW is the world’s biggest automotive manufacturer, a coveted title it captured from Toyota in 2016. Their massive global manufacturing capability and ability to fulfill across multiple continents is a major reason why VW’s Chairman of the Board of Management of the Volkswagen Passenger Cars brand Herbert Diess strongly believes they can surpass Tesla upon activation of their electric vehicle segment in 2020.

"We see Volkswagen as the company that can stop Tesla, because we have abilities Tesla doesn't have today," Diess said in a press conference held in Frankfurt, Germany. His statement holds water, since Tesla’s manufacturing capacity is largely North American-centric, which represents less than 20% of the global automotive marketplace. Although Elon Musk has developed an exceptional EV with his Model S and Model X SUV, there are many automotive experts who are raising concerns about the company’s ability to make good on their ambitious goals without massively increasing its manufacturing capabilities.

This reality of business is why VW is poised to shake Tesla – especially from a global standpoint. In fact, within the 12-individual brands that VW owns, it manufacturer’s and sells more vehicles in two days than Tesla sold during the entire 2016 fiscal year.

To hit the ground running in 2020, Diess signed off on the final design of VW’s first entry to the EV segment – a redesigned hatchback that is like the popular Golf. This car, which has been dubbed as The Neo will initially be targeted in the European market, priced like the Golf’s diesel versions and has a range of 600 kilometers (370 miles) on a full battery charge.

By 2023, VW’s sub-brand will add the Crozz compact crossover SUV for worldwide sales including China. The Lounge will be a more spacious SUV and should appeal to American consumers, as well as the sporty, four-door Aero-e – that can compete head to head with Tesla’s Model S.

Although Diess is optimistic about the future growth of VW and their upcoming entry to the EV marketplace, he remains cautiously optimistic. "We have to watch out, because we have a lot of work in front of us," Diess concluded in his interview, "and the challenges that lie ahead are enormous." With the diversity of manufacturing and the global reach VW currently dominates, his company could indeed surpass Tesla as the global leader in electronic vehicle sales.