Lost in China, winning in Europe: Volkswagen's electric vehicle push

The 2015 diesel scandal severely damaged Volkswagen's reputation. Following this incident, the company decided to pivot toward electric vehicles to build an environmentally friendly image. In 2021, Volkswagen announced its goal to surpass Tesla by 2025, though it has faced various challenges in this process.

The initial electric models failed to achieve the expected success due to software issues and low consumer interest in Europe. In the Chinese market, the rapid rise of domestic manufacturers weakened Volkswagen's competitive edge. Consumer interest also remained low in the U.S.

Volkswagen has begun pursuing a new strategy under the leadership of CEO Oliver Blume. Blume has established collaborations with software and electric vehicle startups to improve the company's products. The new generation of electric vehicles, scheduled to be introduced in September, stands out as a key part of this strategy.

RESURGENCE IN EUROPE

Volkswagen increased its vehicle sales in the second quarter, raising its global electric vehicle deliveries by 38 percent. In Europe, new electric vehicles that have outperformed Tesla's models in recent months indicate that the company is moving toward leadership in this market. Aiming to become Europe's largest electric vehicle manufacturer by 2025, Volkswagen plans to leave competitors such as Tesla, Stellantis, and Renault behind.

Blume aims to succeed where his predecessor, Herbert Diess, failed. Diess had identified electric vehicles as the strategic core of the company and taken bold steps in this field. However, software problems and market competition stood as obstacles to these goals.

CHALLENGES IN CHINESE AND U.S. MARKETS

In China, the rapid rise of domestic manufacturers after the pandemic caused Volkswagen to lose market share. Companies like BYD have surpassed Volkswagen in the Chinese market. These developments led to the removal of Diess from his post, with Blume taking his place.

After taking office, Blume revamped his management team and reviewed costly projects. The troubled software unit, Cariad, was downsized, and battery production targets were re-evaluated. Additionally, partnerships totaling 8 billion dollars were established with China's Xpeng Inc. and America's Rivian Automotive Inc. These steps are seen as part of Volkswagen's efforts to regain strength in the global market.

News Source: 12punto