Last week, Bloomberg’s New Energy Finance released its Electric Vehicle Outlook for 2019.
Here are some highlights …
- Over 2 million electric vehicles were sold in 2018, up from just a few thousand in 2010.
- Annual passenger EV sales expected to rise to 10 million in 2025, 28 million in 2030, and 56 million by 2040.
- Due to rapid reductions in battery costs, the price parity between EVs and internal combustion vehicles is expected to be reached by the mid-2020s.
- By 2040, Bloomberg expects 56% of light commercial vehicles sales and 31% of medium commercial vehicles in China, the U.S. and Europe to be electric.
- China will account for 48% of passenger EV sales in 2025
I shared this report with some of my colleagues, and as I much as I love my co-workers, they do enjoy screwing with me by knocking electric vehicles, and more specifically, Tesla (NASDAQ: TSLA).
I’m still amazed by how many people want Tesla to fail. They may not say it outright, but there’s definitely a lot of animosity focused on Elon Musk. Not sure if it’s sour grapes or just the fact that some people refuse to believe the electric vehicles ARE the future. Either way, one interesting tidbit that did come out of our conversation was: Are there any car makers posing a real challenge to Tesla’s Model 3?
At the moment, there aren’t.
You either have the GM Bolt or Nissan LEAF, both of which are awesome cars, but don’t offer all the bells and whistles you get with a Tesla Model 3. And price-wise, they’re comparable.
Then you have the higher-end offerings, such as Audi-s e-tron, which costs about $35k more, yet offers no more range than the Model 3.
At the moment, it is the Model 3 that puts Tesla in a completely different category.
The only car maker that could soon deliver any real competition to the Model 3 is VW.
There was an interesting piece in Teslarati last week, entitled “Tesla is a pioneer that drives Volkswagen’s EVE initiatives.”
Here’s a snippet form that article …
Volkswagen CEO Herbert Diess was recently asked about his insights on American electric car maker Tesla during an appearance at the Die Welt podcast. The VW boss was candid, stating that Tesla is a pioneer in the electric vehicle market, and it is one that drives Volkswagen in several areas. Despite this, the CEO noted that VW has a thing or two that can be used to catch up to the Silicon Valley-based company.
Tesla had a rough first quarter, driven largely by difficulties in delivering the Model 3 to Europe and Canada. These difficulties, together with several one-time losses, resulted in Tesla posting a $702 million loss for Q1 2019. During the earnings call for the first quarter, Elon Musk admitted that there was some merit in raising capital for the company, and earlier this month, Tesla did just that. Tesla ultimately raised $2.7 billion from its funding round, with CEO Elon Musk purchasing $25 million worth of shares from the offering.
Amidst these headwinds for Tesla, VW CEO Herbert Diess noted that he hopes the American carmaker will survive. “I hope that Tesla survives because it is, of course, an incentive and an impulse for us,” he said. He later added that while Tesla has established a lead in the electric vehicle market, this headstart was “certainly not unassailable.” Diess explained that as a “small, focused company,” Tesla has certain advantages, particularly when it comes to its battery and its autonomous driving technologies.
Nevertheless, Diess stated that Volkswagen has several strengths of its own that can be utilized to compete against Tesla. These strengths, according to the CEO, will allow Volkswagen to potentially overcome the younger American company and become the leader in electric vehicles. “We are big, we are global, and we also have advantages in scaling, starting up factories, and rolling out the business. This will be our chance in the next few years. We will win,” Diess said.
Also noted in Bloomberg last week was that VW is now building two plants in China that will ultimately produce 600,000 electric cars a year. While we often focus on our own backyards, it’s important to remember the the electric vehicle market is a global one, and China’s taking the lead.
All this being said, when it comes to electric vehicles on the road today, it is Tesla that offers the best technology, service, and options in the space. Whether or not that will always be the case remains to be seen. But for now, even with the stock struggling, Tesla is the standard for quality EV offerings.