The world’s major carmakers are considering stopping American businessman Elon Musk and his Tesla, who controlled the production of electric cars. The future of the industry is at stake, and none of the traditional carmakers intends to accept that Musk will put it on the sidelines.
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German Volkswagen and Japanese Toyota are therefore planning to invest up to $ 170 billion (CZK 3.7 trillion) so that they do not lag behind. Volkswagen also relies on production in the Czech Republic.
“The impressive struggle over who controls the future of car production will be much more interesting now,” Bloomberg expects.
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Tesla, which is a pioneer in the production of electric cars and which sets the pace in this sector, has already dominated the first stage of the era of new car propulsion. It has also attracted the attention of investors, with its vision of the next generation of cars and its penetration in the new market for fully electric vehicles. At the opposite end are the titans of the automotive industry – Volkswagen and Toyota, the two largest carmakers in the world. Each year, they sold ten or 11 cars against one sold by Musk. Both Volkswagen and Toyota are well aware that the era of battery-powered vehicles is here, so they are devising a strategy to stay in the game.
In December, the two masters of mass-producing cars outlined, over five days, plans to gradually invest $ 170 billion over the next few years to maintain their position in the industry they had ruled for decades. Their bosses realize that the transition from internal combustion engines will not be gradual and properly prepared. On the contrary – it could be quite ugly. Something like when the American company Apple invaded the mobile communications market and crushed the Finnish Nokia, which until then had dominated the mobile communications market.
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After a year of extraordinarily strong growth, after which Tesla has become by far the most valuable carmaker of all time, the trillion-dollar question is whether Musk’s lead in next-generation car production is as unsurpassed as his company’s market value suggests.
“When the two biggest carmakers in the world decide to start making electric cars now, there is no room for speculation – the mainstream will simply be electric,” said Andy Palmer, who previously ran the British carmaker Aston Martin and was also led by the Japanese carmaker Nissan. Palmer is sometimes nicknamed the spiritual father of electromobility because he was at the birth of the Leaf battery car in Nissan. “I expect the transition to electric cars will be faster than anyone can imagine.”
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The ways in which Volkswagen and Toyota have chosen to defend their positions cannot be more different than one would expect from the proud titans of the automotive industry in Germany and Japan. While one has set in motion and has Tesla right in front of it, the other is investing heavily in electromobility, meanwhile considering strategy and waiting for the first phase of the revolution in the automotive sector to show who stands up.
The monster that is furiously trying to deal with Musk is Volkswagen. The company, which has been here for more than 84 years and has gradually grown to include a dozen car brands in its stable, manufactures in about 120 plants around the world and employs more people than live in Detroit, the center of the American automotive industry. . During the year, the Volkswagen Group collected approximately $ 280 billion (CZK 6.1 trillion) from the sale of cars of various models.
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For every year that Herbert Diess has been at the helm of Volkswagen, the carmaker has announced an unbeatable budget for electromobility. Last December, Diess unveiled its biggest plan yet – to spend € 89 billion over the next five years on electric cars and software development. It is Muska Diess who often uses it as a yardstick, to the extent that he himself admits that he is already annoying some colleagues in the Volkswagen management. In October, he surprisingly welcomed Musk as a guest at a conference attended by 200 top Volkswagen executives.
“Our transformation will be rapid,” Diess said last March at a similar event hosted by Tesla. “And it will be bigger than the industry has experienced in the last 100 years,” he added.
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From January to October last year, Volkswagen delivered about 322,000 fully electric cars, slightly more than half of the planned 600,000. Sanford C. Bernstein & Co. analysts estimated that Volkswagen would sell about 450,000 for the year. “It doesn’t mean the end of the world, but there’s no reason to celebrate,” they warn.
But Diesse doesn’t seem to mind. The architecture, which is shared by ID.3 and ID.4 cars, will support a total of 27 different electric cars by the end of this year. Volkswagen will produce them first in five plants – in Germany, China and the Czech Republic – and later in a total of eight. It will begin production at two other plants in Germany and at one of its plants in the United States, Chattanooz, Tennessee.
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