Volkswagen and Audi are starting to challenge Tesla

Volkswagen (VLKAF) sold 231,600 battery-powered electric vehicles in 2020, according to data published by the company on Wednesday. Although this is still less than half the number of sales Tesla (TSLA) done, this represents a 214% increase over the previous year and shows that Germany’s huge auto industry is starting to challenge the leader in electric cars.

“We are on track to achieve our goal of becoming the market leader in battery powered electric vehicles,” said Ralf Brandstätter, CEO of Volkswagen Passenger Cars, in a statement on Tuesday.

Volkswagen’s most popular battery-powered electric vehicle was the new ID.3, which sold 56,500 units. Sales of the compact e-Golf and even smaller e-up! were 41,300 and 22,200, respectively. Audi, the group’s luxury brand, sold 47,300 e-tron SUVs and sportback models, while customers bought 20,000 electric Porsche Taycans.

Sales of hybrid vehicles, powered by electricity and conventional fuels, have also increased. Volkswagen sold 190,500 plug-in hybrids last year, a 175% jump from 2019.

“2020 was a turning point for Volkswagen and marked a breakthrough in electric mobility,” said Brandstätter.

Tesla still presents a formidable challenge, however. The company led by Elon Musk has achieved its goal of building 500,000 cars in 2020, it reported earlier this month. Production and deliveries have increased by more than a third over 2019 levels, an impressive gain, especially considering that the company’s factory in Fremont, California, has been closed for almost two months due to the pandemic. It is building a factory in Germany after opening another in China in 2019.
Investors rewarded Tesla by making it one of the most valuable companies in the world. At $ 805 billion, Tesla’s market value is more than eight times that of Volkswagen, although the German company makes about 19 times as many vehicles.

Volkswagen said it plans to invest € 35 billion ($ 43 billion) in electric vehicles by 2025, and sales figures for 2020 suggest that customers are starting to respond. The manufacturing giant plans to launch about 70 pure electric models by 2030, while racing to catch up with Tesla.

Trains with electric vehicles stop in front of the Volkswagen factory in Zwickau.  The company is producing its first electric SUV at the factory.
Other German automakers are entering the race. BMW (BMWYY) sold 44,530 battery-powered electric vehicles in 2020, an increase of 13% over the previous year, and more than 148,000 plug-in hybrids. Daimler’s (DMLRY) Mercedes-Benz sold more than 160,000 plug-in hybrids and pure electric vehicles last year.

The electric boom came even when the pandemic pushed general sector sales back. The Volkswagen Group sold 9.3 million cars in 2020, a 15% drop from the previous year, but said that deliveries fell only 3.2% in December, as demand rebounded.

Tesla is growing.  Is it too late for investors to enter?

Volkswagen is trying to prove that an automaker that just a few years ago was deceiving regulators to sell polluting diesel can produce electric vehicles that people want to buy and that lawmakers will adopt when facing the climate crisis.

It is making significant inroads in some markets. In Norway, where financial incentives make buying most electric vehicle models cheaper than gasoline-like models, the Audi e-tron was the sales leader in 2020, surpassing Tesla’s Model 3.

.Source