VW is set to overtake Tesla to become the biggest electric car brand in 2024

Volkswagen will become the biggest electric car brand in the next two years when sales overtake Tesla from 2024, according to an industry report

  • Bloomberg Intelligence predicts Tesla will be the top EV seller in the next 18 months
  • VW will overtake it for global sales in 2024 as demand for battery cars rises
  • Other traditional automakers will stay behind Tesla in 2025, report says

Tesla will retain its global electric vehicle sales crown for another 18 months before being overtaken at the top of the charts by German auto giant Volkswagen, according to a new industry report.

Profit incentives to catch up with Elon Musk’s automaker are lacking in the short term for most mainstream automakers amid rising battery costs and a lack of scale, although Volkswagen is the exception. according to Bloomberg Intelligence.

It says the Wolfsburg-based brand is on track to overtake Tesla’s electric car volume in 2024, with global demand for battery-powered cars expected to more than double by 2025.

Volkswagen will become the world leader in electric vehicle sales by 2024: a new report predicts that Tesla will be knocked from the top of the electric car rankings in about 18 months

Bloomberg Intelligence analysis shows that China’s BYD is on track to rank third in electric vehicle sales globally in 2025, followed by a glut of “legacy automakers”.

He predicts that only by the end of the 2020s will US and Japanese automakers be serious challengers for a spot in the top three for electric vehicle sales.

In a bid to challenge Tesla’s $686 billion market capitalization – which is almost double that of all US and European car brands combined – the report points out that traditional automakers are unlikely to succeed in divesting the assets. related to electric vehicles that are closely linked to their combustion operations and whose cash flows pay for the transition.

Volkswagen is the exception, with the auto giant currently weighing the feasibility of a potential IPO of its Porsche brand to unlock value from the luxury carmaker.

Given the potential of 30% of the company’s electric car sales in 2023 and around 45% in 2025, it is significantly ahead of its peers and could attract an 85 billion euro luxury-based valuation. for the IPO and possibly an even higher tech-driven valuation. , according to the report.

Production of his long-awaited identity card. Buzz (and the ID. Buzz Cargo van) recently got underway at its Hannover plant, with the first vehicles due to be delivered to customers in the fall.

While VW is expected to overtake Tesla for global electric car sales from 2024, other major manufacturers - including Mercedes, Ford and Toyota - will lag behind Elon Musk's brand

While VW is expected to overtake Tesla for global electric car sales from 2024, other major manufacturers – including Mercedes, Ford and Toyota – will lag behind Elon Musk’s brand

The Volkswagen Group has estimated that it will have an electric car sales mix of 30% in 2023 and around 45% in 2025

The Volkswagen Group has estimated that it will have an electric car sales mix of 30% in 2023 and around 45% in 2025

Tesla will maintain its lead as other brands suffer production issues caused by global semiconductor shortages

Tesla will maintain its lead as other brands suffer production issues caused by global semiconductor shortages

“Looking ahead, automakers in Europe, China and elsewhere will continue to challenge Tesla with an impending wave of new models, although the incentives for profitability are limited due to rising battery costs and a lack of scale,” says Michael Dean, senior European automotive industry analyst at Intelligence Bloomberg.

“That could change in 2025-2026 as more brands reach critical mass on next-gen models with proprietary software.”

“There are a number of external factors that are difficult to take into account and bold BEV [battery electric vehicle] ambitions did little to prevent crisis-level valuation multiples fueled by recession fears, rising interest rates, supply chain constraints and inflation.

Battery prices remain key to BEV cost competitiveness and Volkswagen is investing up to €30 billion in the supply chain, including the opening of six new battery cell factories in Europe by 2030 .

Swedish battery developer Northvolt will also start production of premium cells for VW 2023.

Production of the highly anticipated VW ID.  Buzz recently started up at its Hannover plant, with the first vehicles due to be delivered to customers in the fall

Production of the highly anticipated VW ID. Buzz recently started up at its Hannover plant, with the first vehicles due to be delivered to customers in the fall

An increase in electric car sales in China is expected to see EV production soar in coming years

An increase in electric car sales in China is expected to see EV production soar in coming years

China will become one of the main markets for electric cars over the next three years, with a quarter of all passenger vehicle registrations by 2025 to be fully electric.

“Sales in China have surged since the launch of the country’s new energy vehicle credit program despite erratic component supply,” said Steve Man, China market expert at Bloomberg Intelligence.

Sales of Volkswagen, BMW and other foreign brands in China could come at the expense of price and profitability, having ceded first-mover advantage to Tesla and local manufacturers.

BYD, Nio, Xpeng and other local companies are rapidly filling technology and brand gaps, enticing consumers not only with range and power, but also with lower prices, luxury trims and even virtual reality entertainment.

The report says sales of Ford’s all-new electric F-150 Lightning will help close the gap with Tesla becoming the battery-only full-size pickup truck with the Elon Musk brand and General Motors not ready to compete in this. sector before 2023 and Rivian’s small-scale production of R1T trucks described as “non-threatening”.

Japan would be lagging behind with its domestic market dominated by hybrids rather than pure electric cars.

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