Electrified: A Path to Recovery for the Global Auto Industry
by Christina Nagy-McKenna, Enerdynamics Facilitator
The green recovery is coming to auto manufacturers and consumers as mainstream and niche automakers announce their next moves in a world that is rapidly adopting energy alternatives as the new norm. The big, bad, electric GM Hummer roared onto the EV market this week with a rock and roll soundtrack and an introduction by none other than four-time NBA champion LeBron James. The quiet super truck raced, climbed, and crab walked across our television and laptop screens during an extended trailer that had more in common with a music video than a traditional car commercial.
Luxury sports car brand Porsche fast tracked its EV goals announcing that half of its vehicles will be powered by batteries or plugged in to the electric grid by 2025. Volvo recently launched its first EV, the XC40 Recharge P8, and it is looking to sprint past other brands by having half of its vehicles be fully electric by 2025. Lamborghini even built an electric concept car using supercapacitors. And even though its V-12 engine still did most of the work, the idea that a stylish, superfast, supercar could someday run on electricity is a far cry from the sensible sedans and hatchbacks that have defined the electric revolution of the early 21st century.
Even with its loud and brash Hummer debut, the biggest recent splash may belong to Porsche and Lamborghini’s corporate cousin, the market-dominating Volkswagen, which is now shipping its first all-electric vehicle, the ID.3, to the European market. Standing behind all three brands is the Volkswagen Group, which plans on leading the electric and digital automobile markets in all segments with its VW, Porsche, Audi, Škoda, Seat, and Cupra automobile brands. In its way is Tesla, the largest electric automaker and the only major car company not saddled with a traditional, combustion engine auto business.
VW Group Chairman of the Board of Management, Dr. Herbert Diess, has made it no secret that VW is chasing Tesla while admiring what the company has accomplished. In a recent LinkedIn comment translated from German, he wrote: “Elon Musk delivers results that many thought was impossible. They show that you can be profitable with electric cars.”
While Tesla delivered more than 367,000 electric vehicles in 2019, Volkswagon delivered more than 140,000, but that was before the new ID family of cars and before the Group’s new-found ambition to not only dominate the EV market but to position itself as the leading car company for what it calls e-mobility. The Group has ambitious plans to set the bar not only in the electric market segment across all types of vehicles but also in IT, autonomous driving, and EV production. To accomplish this, the Volkswagon Group announced a spending plan of 33 billion Euros (approximately $39 billion currently) across its brands. It has also inked a partnership deal with Ford that spreads some development costs between the two companies. While Ford will use VW’s new Modular Electric Drive Matrix) platform to manufacture cars in Europe, Volkswagen has invested $2.6 billion in Ford’s self-driving software company, Argo AI. The Group hopes to sell 1.5 million electric vehicles by 2025. A lofty goal? Most certainly, but with a huge global production footprint, the Volkswagon Group is well positioned as it systematically builds new production capabilities at existing plants in Europe, China, and the United States.
As consumers, it’s time for us to buckle up, because it’s about to get interesting. Other new vehicles coming to market in the near future include the Ford Mustang Mach-E, the aforementioned Hummer EV, the Cadillac Lyric Crossover, and Volvo’s XC-40. Together with the many offerings in the hybrid and plug-in market segments, consumers will have robust choices as automakers usher us into what some hope will be a new era for the automobile industry.
Are there issues to overcome? Yes. For starters, the sheer number of batteries that will need to be produced is staggering, the need for additional public charging stations is equally large, and the drive to make batteries lighter and with greater range is necessary to help consumers overcome “range anxiety.” Not to be overlooked is the world’s No. 1 automaker Toyota, which played a large role in the initial hybrid and plug-in electric automobile markets. It is surely watching the Volkswagon Group’s strategy with great interest.
Do your employees need to explore how electric vehicle and other key trends will dramatically transform today’s energy companies? Enerdynamics’ the Future of the Utility Company has been recognized by Brandon Hall as part of an award-winning leadership program. Contact us at email@example.com or 866-765-5432 ext. 700 for more information.
Annual General Meeting: Volkswagen Confirms Outlook for 2020 and Underscores Future Investments, Volkswagen Newsroom, September 30, 2020. https://www.volkswagen-newsroom.com/en/press-releases/annual-general-meeting-volkswagen-confirms-outlook-for-2020-and-underscores-future-investments-6466
Foote, Brett, “Volkswagon and Ford Officially Sign Off on Landmark Partnership Agreement,” Ford Authority by Morolix, June 11, 2020. https://fordauthority.com/2020/06/volkswagen-and-ford-officially-sign-off-on-landmark-partnership-agreement/
Frangoul, Anmar, “Volvo Chief Stresses the Importance of State-Backed Charging Infrastruture for Electric Vehicles,” CNBC, July 22, 2020.
Root, Al, “Volkswagon’s CEO says Tesla – Or Volkswagon -- Could Be the Most Valuable Company in the World Soon,” Barrons, updated July 25, 2020, original July 24, 2020. https://www.barrons.com/articles/tesla-has-a-giant-fan-germanys-vw-51595601718
Valdes-Dapena, Peter, “Lamborghini’s Mission to Disrupt the Future of Electric Super Cars,” CNN Business, November 8, 2019. https://www.cnn.com/2019/11/05/cars/lamborghini-supercar-electric-supercapacitor/index.html
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