Will a move for the development of electric cars impact Volkswagen?


When Volkswagen appointed Herbert Deiss to the chairman position, the hope was that he could keep the company moving along. The stock price was at a high point when he first took over, but the last six years have been nothing if not challenging for the manufacturing giant. Indeed, various scandals have hit the company in recent years, including the emissions scandals that led to a huge reputational hit and a hefty fine. Add in the standard boardroom strife that is common at any big business, and Volkswagen has been in a tough place for some time.

Deiss, to his credit, arrived in 2015 as the diesel emissions scandal was beginning to really hit the worst point. Despite noting stern opposition from within the company that he is yet to turn around, the VW chairman was clear in one thing – that catching up with Tesla is the primary aim. Seen as the next leader in the auto industry, VW – who is currently the largest automaker in numbers sold worldwide – need to innovate in a bid to keep up with the electric revolution that is taking place in the industry.

At the helm of this is Tesla, explaining why the company is seen as one of the most exciting companies to watch in the future.  Today, Tesla is the market leader in terms of value in the automaking industry. Despite selling a tiny amount of the vehicles of VW, they are well ahead in many other aspects.

This has led to the development of what is being termed “Mission T” within the company and is believed to look to match-up with Tesla by 2024 in terms of technological output. The aim is to move into a more electrical-driven approach to automaking, and this could give them the edge over Tesla.

Is a catch-up possible at this stage?

Many are already suggesting that the VW-Tesla battle is akin to when phone giant Nokia, the real leader of the ‘first generation’ of mobile phones, was left in the dust by Apple when the smartphone era began. Unable to compete and build something both better and as trusted, Nokia fell by the wayside and watched as Apple claimed what used to be their specialty.

Is VW in the same position, then? Some believe so. The challenge stems from trying to keep up with a market that is already growing fast with a leading name. Simply promising to offer better than they do is not enough; consumers want to see something that actually encourages them to switch. Tesla is now a trusted name in the automaking industry for electric vehicles – simply saying you do it better is not enough to win back consumers who have left.

Add in the fact that Tesla is leading the way regarding things like charging stations and its control over the supply of lithium ion batteries, and it is hard to see any company keep up with them in the electric cars industry. While ambitious, some already believe that VW is on a doomed path – trying to keep up with the runaway market leader, who has so many advantages already, is often a fool’s errand.

Nokia once assumed they were big enough to see off the challenge of Apple; can VW really hold off the rise of Tesla and once again beat them into top spot?