Volkswagen is reportedly ramping up production of electric cars to around 1 million vehicles by end of 2022.
Volkswagen has said it is readying two Chinese factories to build electric cars next year. The Chinese plants will have a production capacity of 600,000 vehicles, according to Volkswagen’s plans, which have not been previously reported — revealing VW’s ability to industrialise production faster than other pioneers in the electric vehicle market.
CNBC reports the scale and speed of VW’s electrification push marks a shift in favour of established manufacturers that can use existing factories and profit from combustion-engined sport utility vehicles (SUVs) to scale up faster than startups.
“The truth is barriers to entry in autos remain high,” Max Warburton, an analyst at Bernstein Research, told CNBC “Making cars is hard. The move to electric vehicles will be expensive, but will probably be led by traditional manufacturers.”
According to CNBC VW is leveraging its large infrastructure of suppliers, factories and workers, long a handicap to its profitability, “more aggressively” than rivals BMW, Renault, General Motors and Tesla, which were all quicker to sell a custom-designed electric car. Rather than adjusting production gradually, and using multi-power train platforms, Volkswagen is making a massive bet on a dedicated electric vehicle architecture, known as MEB, in the hope of increasing economies of scale sufficiently to push down the price of electric cars to around 20,000 euros.