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Tesla Expected to Lose Throne to Volkswagen as World’s Largest Electric Vehicle Maker: Bloomberg

Darren Maung
Darren is an aspiring writer who wishes to share or create stories to the world and bring humanity together as one. A massive Star Wars nerd and history buff, he finds enjoyable, heart-warming or interesting subjects in any written media.
Published: June 20, 2022
The exterior of a Tesla store photographed on June 14, 2022 in Berlin, Germany. (Image: Jeremy Moeller/Getty Images)

On Tuesday, June 14, Bloomberg released a study that hints that electric vehicle (EV) maker Tesla will be dethroned as the world’s largest EV producer. 

With considerations towards costs and expansion plans worldwide, the study also suggests that German car maker Volkswagen will be taking Tesla’s place by 2024.

Tesla’s decline, Volkswagen’s rise

According to the Bloomberg study, Volkswagen is expected to increase their production of their battery-powered vehicles to “more than two million” units in 2024, which would put them above Tesla.

“Tesla’s new EV capacity and buoyant global demand should enable it to retain its sales crown for at least another year, though Volkswagen is hot on its heels and could overtake in 2024,” the report said.

“Execution will be key to encroaching on Tesla’s $750 billion market capitalization.”

The report said that increasing battery costs and “a lack of scale” have held back other competitors like Ford and General Motors (GM)  from reaching Volkswagen’s heights, allowing Tesla to remain the biggest EV maker in the U.S. for the time being.

Bloomberg cited Volkswagen’s production and sales in Europe for its expected success, and believes that the German company will reach out to China for its expansion instead of the U.S.. The company hopes to sell at least 140,000 units in China in 2022.

According to Volkswagen’s annual report, sales in the U.S. accounted for  less than ten percent of the company’s total last year. 

Sales of EV’s in China have risen significantly since the local energy vehicle drive began, even with an “erratic component supply,” Steve Man, Senior China Automotive Industry Analyst at Bloomberg Intelligence said.

With expectations of Volkswagen’s expansion into China, Tesla, which has two models made in the country, could take the fall, Bloomberg wrote. 

Bloomberg also cited Japan’s own EV makers as using “strategies with comprehensive offerings to meet the requirements of different markets,” Senior Japanese Automotive Industry Analyst at Bloomberg Intelligence, Tatsuo Yoshida, said.

Despite Tesla’s entry into the “EV revolution” and having attracted 75 percent of all electric vehicles sold in the U.S. during Q1 2022, competitors are slowly catching up by taking some of the market share.

Ford has come up with its new Ford F-150 Lightning, garnering up to 200,000 new orders. The company also hopes to produce an additional 150,000 units per year starting in 2023.

GM has its “Ultium” platform, consisting of new batteries, motors, software and other components, hoping to compete with the prominent EV makers. The company also teased the Chevy Silverado EV, which will be more available than the GMC Hummer EV.

Sports car maker Porsche — which is under Volkswagen AG — is also in possession of its own electric car model.

South Korean-based company Hyundai also won the title for 2022 World Car of the Year with its Ioniq 5 model, which uses an 800-volt build compared to Tesla’s 400-volt one to allow faster and cheaper charging.

Regardless of the expectations, Tesla has widened its aspirations in March by shipping its cars from its gigafactory in Berlin, where the company hopes to make 500,000 units per year. However, the launch of its Cybertruck could be delayed as Volkswagen could expand its EV share with 16 new models.

The report suggests that Volkswagen’s development came “as part of a goal to achieve a 25 percent BEV sales mix by 2025-26,” in addition to the company’s ability to “use its global scale to achieve the top end of its new 8—9 percent 2025 Ebit-margin target early, ahead of consensus.”

Tesla CEO Elon Musk also joked about how he was getting “free advertising” via his competitors, as shown in a tweet on Friday. Musk also said in an interview with the Tesla Owners Silicon Valley YouTube channel that EV startups Rivian and Lucid Motors will go bankrupt if they don’t cut costs.