Despite ambitious plans to challenge Tesla’s electric vehicle (EV) dominance, German car makers find themselves falling further behind in the EV race. Tesla’s impressive delivery of 889,015 cars in the first half of the year outshined the combined sales of Volkswagen, BMW, Mercedes-Benz Group, and Porsche.
Software problems delaying models and declining sales in China, their biggest market, are causing the Germans to lag behind Tesla and local champion BYD. Even in their home market, Tesla remains the leading EV brand, putting German car makers in a difficult position.
Tesla’s aggressive price cuts and increased volume are creating mounting pressure on legacy manufacturers, who are struggling to keep up with the rapidly evolving EV market. In contrast, Tesla’s EV sales outperformed VW’s by a significant 30 percentage points in the last three months.
The German car makers’ weakening position in China, historically dominated by VW, BMW, and Mercedes, poses another major threat. Chinese brands have excelled in building affordable EVs tailored to local preferences, surpassing the German manufacturers in recent times.
Although the situation seems challenging for German car makers, they still generate healthy profits from selling combustion-engine models. They are doubling their EV sales year-over-year, and their plans to introduce EV-focused platforms in the mid-2020s could potentially alter the dynamic.
VW, for instance, is preparing a compact EV priced below €25,000, aiming to appeal to a wider market. Mercedes plans to introduce an electric version of its compact CLA sedan in the US next year, competing with Tesla’s Model 3. BMW, on the other hand, is betting on its “Neue Klasse” underpinnings to improve sales by cutting battery costs and increasing range and charging speed.
The next few years may see a big push from German car makers, especially with their next-generation EV platforms in the pipeline. These developments may change the game, giving them an opportunity to catch up with Tesla, even in the fiercely competitive Chinese market.
Check out the latest news in our Global News section
Stay updated on environmental data and insights by following KI Data on Twitter
