Why VW’s Factory Closures Are Just the Beginning

[@DailyBeatings]

VW, along with Mercedes, had their chance to partner with local companies and export the IP to Germany, but they made a fatal error that tariffs and sanctions can't fix...

[@BillyNoMate]

This is the Nokia, Blackberry moment.

[@AdiSuffian]

Kodak has left the chatroom

[@GForce162]

Fact: VW is the most engage one in EV shift/price war in China, others...

[@Emiliocab47]

VW, Ford, Vovlo, and others are in a world of pain now.

[@razvanyke]

100% .. we live history.

[@richardleenders8243]

You hit the nail on the head 👍

[@connclissmann6514]

Having worked with larger German companies, I do not believe they can move as fast as you describe is needed. Not being defeatist, just based on experience. I wish they could change as it is an esteemed brand. Their products are now far too expensive.

[@LeicesterMike]

@@connclissmann6514 totally agree, whilst in the past the methodical slow approach worked to their advantage, this cultural strength is now a weakness.

[@oceanwave4502]

An expensive but still sellable products are wet dream of any capitalists. Why work more innovatively? Just together collectively increase the prices of products (from BMW, to Mercedes, to Porsche, to VW...). The customers have no other options but to buy anyway. This is like Oracle database. If newcomers, e.g. like Chinese cars coming, mount up the tariff!

[@winfriedtheis5767]

VW has been overpriced for decades, but they had super brand loyal customers. And sorry the quality of the interiors and the software is just totally disappointing.

[@LeicesterMike]

@@winfriedtheis5767 one of many mistakes that VW made, is to think they could become a software company.

[@midnight4109]

VW, work fast? it takes them a decade to produce a decent product and by then it is outdated, and relatively expensive.

[@Streamerabi]

The problem is.. they've just become way too expensive for what they deliver, also here in Germany :( I'm pretty sure they can't affort to be competitive, without making significant structural changes

[@AlexanderTanned]

That's one of the main issues: they offer too little for too much money when Chinese EVs are offering exceptional quality and innovation for a fraction of the price. They also came to the EV world rather reluctantly, looking down on customers and on the importance and decision making power of the Chinese people, who are their biggest market. It's just been horrendous management and sheer arrogance.

[@midnight4109]

This has been brewing for years. VWs colt following has always been there to prop them up until recently.

[@GallAnonim-jx2cz]

In China where I live Volkswagen sells cars with standard automatic transmission, and in Germany ask to pay extra. I really don't know ANYONE in China who is driving manual transmission. Cars are affordable with high competition between automakers - paradise for consumers.

[@stickynorth]

VW's wounds are entirely self created...

[@midnight4109]

Over the last 50 or 60 years.

[@alexcumbers]

Yep, without a miracle, they see screwed.

[@ChristianThePagan]

The downfall of VW is what happens if you put mossback conservatives in charge of a tech company in a market where products evolve at break neck speed. These people's brains don't work fast enough to comprehend a marketplace like that. Sticking with time tested ICE while you pause to see how the market evolves is the same as declaring publicly you are planning to deliberately run the company into bankruptcy.

[@JohnSmith-em9ks]

I agree. I was with VW quality for 37 years and they found my job no longer needed. Really? Look at them now. Quality is how good now? You tell me.

[@gslaw11]

problem with VW is that it's too expensive... that's all.

[@GallAnonim-jx2cz]

In China ID3 cost 13k USD and still nobody buys it:) In China and actually best selling cars are not pure EV but PHEVs like Liauto and Aito. BYD offers most of the cars as pure EV or PHEV. Volkswagen, Benz and BMW don't have this choice. They developed pure EVs with poor range and nobody wants it. Add a petrol motor to ID3 and it will sell much better, but this will take years of German old-fashioned development, while Chinese competition develops new car in ONE YEAR.

[@gslaw11]

@@GallAnonim-jx2cz a I sholud add that it is to expencive in Europe becouse electrification and possibilty to chcerge EVs especially here in Poland almost doesn't exist, so for us now is much better to buy old fashion combastione engine cars... but VW is still too expensive for us and chinese combustion cars are very very competetive in our markets now. Yea that's true Germany stayed behind in analog world - it is european empire collapse - the same is in France... the same will be with US.

[@__patriot_1776]

@@gslaw11 same in Sri Lanka, VW lost the lead in the late-80s to the Japanese automakers. The last successful best-selling VW was the Volkswagen Type 2. Nowadays the only sedan preferred by the higher positions of the Sri Lanka Army is the Volkswagen Passat. Mazda and Subaru completely left Sri Lanka, and in a few years' time, Toyota, Honda, Suzuki, Nissan and the rest of the Japanese automakers will lose to Chinese automakers like BYD, MG, and Geely.

[@oxidalpha6350]

@@GallAnonim-jx2czbenzes and bmw still have more range than these chinese ev. You can compare all the byd xpengs honqies nios voyah frees doesent matter. None of them are efficient like eqs and this car was engineered 6-8 years ago. Just imagine the eqs with lates tech. So vw could make better ev than every other chinese car it will not change anything. Chinese people now will buy chinese brands its just patriotism.

[@rantingyoof6960]

That plus shocking UI. Those touch capacitive buttons were so stupid.

[@MetaView7]

It wasn't that long ago GM sold more Buicks and Cadillacs in China than in USA. In the blink of an eye, GM China is going bankrupt. That's how fast things can change in China.

[@williamseric6492]

Yes but at least America brought democracy to Iraq and Afghanistan.

[@pangtianran110]

​@@williamseric6492 yeah 20 year 10K soliders life 10 trillion $ to replace Taliban with Taliban i call that a win any day bro

[@williamseric6492]

@@pangtianran110 well we should outsource more to China and India to have money to take on Iran and bring our values there. As a jewish American I think its best for our national interests

[@pangtianran110]

@@williamseric6492 u confused me with all these iran saber rattling u sounds like Israeli enough to talk about iran but thats not American enough or i might be wrong LOL

[@krassidimitrov2]

Im been working in the automotive industry in Germany as a contractor. Guys with VW permy works max 37h|weekly. Friday afternoon offices are desert. Everyone is prioritizing private life. Huge huge salaries and bonuses. They must change mentality and work hard and decide fast. Even remote working is like a dream there.. still thinking like 20y ago!

[@darrencox150]

No doubt the German tax payer will be forced to bail them out!

[@4literv6]

Sadly yes, just ask any of us Americans about the to big to fail debacle under obummer back in 08/09. We had car ceos flying to Washington onboard their gd private jets begging for bailouts&cheap guaranteed loans. 🙂 They got em to by the tens of BILLIONS at our expense and we got NOTHING back for any of it. Chrysler took over 15bill from us, then filed for bankruptcy again, didn't pay any of it back&got bought out by stellantis. Gm took over 23billion in total, paid some of it back, filed for a structured bankruptcy&is now back in just as much debt as was discharged. Ford took over 12billion in loans paid most of it back but also is deep in debt&behind in evs.😑

[@BorislavAndrinBoka]

10years😂😂😂Sey Deutsch

[@javelinXH992]

VW don’t have an electric equivalent of the Up or Polo at a decent price. What we want is a smaller car in the £20k to £30k range. If manufacturers can’t do that, it’s a problem, as most people can’t afford to go above that price.

[@WuJiZhang-wc9mc]

In China, fast pace technology win over traditional slower pace of innovation In China progressive over conservative In the west, conservative over progressive In China, conservative were seen as regressive (moving backward)

[@knuth.nyhagen82]

Very well spoken! It's sad to see how Europe is struggling - and keep telling there is not enough demand for EV's. It's a lie. In Norway we just passed 94% of EV's of the total car sales.

[@Streamerabi]

Go Norway! 🥳🎉

[@martijnkosters9024]

Exactly, EVs are blamed, but nobody mentioned that VW's products are a bit meh at best.

[@bobbybishop5662]

The rest of the world in not Norway. PEV sales are dropping , hybrids will dominate this year. 2:30

[@jomo2483]

Most people are buying hybrids my guy. Norway is not a true reflection of the entire EU economy. Your population is so small, I think everyone can switch to using horses in less than a year. For much larger countries, there's a lot of infrastructure problems. And an energy crisis. Also I don't see Norway, stop selling Oil to save the environment. It's one thing to buy EVs, but it beats the point, if the grid system is still fossil based. Kinda silly if you ask me. There's no such thing as non-destructive industrialization as well. At it's core, any manufacturing relies on over-exploitation of natural resources, which damages the environment. So whether you driving an EV, ICE or hydrogen. You'll still have a negative impact on the environment. The only way to save the planet is consume less, don't own a car if you live near a city. Use mass transits. Anything else is just a clown show

[@jackbleiham8475]

​@jomo2483 : What's wrong with a horse 🐎 or a 🫏 donkey? The byproduct goes in the garden !

[@marcoshenz]

Brazilian here. I would happily buy an ID1, if it existed. Instead, VWbr sits on their asses and all they do is lame compact suvs. There are not even hybrids. I drive a 15 VW Up. Asap putting an order on a BYD Seagull...

[@monkeysuncle2816]

I'd buy a VW if they re-released the Karmann Ghia, in either ICE or EV, but preferably EV.

[@GallAnonim-jx2cz]

I live in China and actually best selling cars are PHEVs like Liauto and Aito. BYD offers most of the cars as pure EV or PHEV. Volkswagen, Benz and BMW don't have this choice. They developed pure EVs with poor range and nobody wants it. Add a petrol motor to ID3 and it will sell much better, but this will take years of German old-fashioned development, while Chinese competition develops new car in ONE YEAR.

[@dyu999]

Ppl in Australia prefer hybrids, even BYD sold half of its cars here in PHEV, pure EV is a nightmare.

[@benommo]

​@dyu999 we? no we don't. Evs are not a nightmare here in aus, you don't know what you're talking about. Toyota has sold this bs and you're taking the bait. Toyota all ga ga about their hybrids..it's a joke. Toyota won't be laughing soon

[@dyu999]

@@benommo Yes it's a nightmare, hybrids are the future, go check the August sales figures.

[@edwardkon939]

Elliot, the fact that VW got rid of its ceo Herbert Diess means that they have kicked the can down the road. The days of reckoning have finally arrived for VW.

[@fpsharing]

Days of reckoning arrived for the west coming alright. The Chinese are smart, quick and efficient. Just wait.

[@BrunoHeggli-zp3nl]

Wrong!Diess was just not good enough!

[@midnight4109]

@@edwardkon939 You mean VW isn't going to weasel out of it?

[@edwardkon939]

@@midnight4109 It is gonna be absolutely daunting.

[@johnnyonline]

VW's lack of urgency on EV's has been driving me crazy for years. My last 2 cars before we went electric were VW's (Polo and Jetta) and I was planning to drive an electric Golf at some point. But as of September 2024 VW have yet to launch a single EV into the Australian car market. That's insane. Every time I see a local review of the ID Buzz or ID 3 or whatever VW are always planning to launch next month. It's always next month. What are they waiting for? Just launch one, learn, innovate and launch another. There should be an electric Beetle. Why isn't there an electric Beetle?

[@jasonmugridge]

Agreed, although the ID Buzz is about double the price it should be. As for the ID 3 thats about the right price in China where it was about £12,000.

[@jasonmugridge]

Agreed, although the ID Buzz is about double the price it should be. As for the ID 3 thats about the right price in China where it was about £12,000.

[@mahonjt]

Ditto

[@lynnwandering581]

ID3 in China sells under 100k RMB, really a good deal, still they are not doing great, not like VW’s Golf or Polo in the past two decades, the brand name is loing its charm to Chinese consumers rapidly, if they are not doing good in its largest markets, thing would not be fine for its Europe markets too.

[@johnnyonline]

@@jasonmugridge the price of the ID BUZZ is supposed to start at $90k here in Australia. START at $90k. WTF? I assume that's the one with no seats in the back. The comfy one is supposed to be $120,000. Get real VW.

[@WingPoyLeong]

GREED IS THE REASON... REMEMBER THE WORLD FAMOUS VW DIESEL GATE SCANDAL? THEY HAD THEIR DAYS.

[@MrGMawson2438]

This has been coming for years

[@midnight4109]

No truer 6 words have ever been spoken.

[@steveknight878]

Another problem that exists with the traditional car maker/dealer setup is that a car dealer relies quite a lot on after-sales stuff - servicing the cars, which is quite a lucrative business for them. With EVs, there is less servicing required. So much of their income will disappear if they sell an EV - so the prefer to sell ICE cars and discourage buyers from opting for an EV. Then you have all the parts manufacturers. What are the likes of AC Delco going to make for EVs that will replace their ICE parts market, for instance. No clutches, flywheels, gearbox rebuilds, engine rebuilds, lubricating oils, clutch fluids, spark plugs, Diesel injectors etc.

[@midnight4109]

VW fans have always put up with lack luster reliability and dealerships who weren't above board due to the quality of their bodies and German engineering including suspensions. Now, for the first time, the new EV models don't appeal to their fans which is a big problem for them. They just don't have a place in the future of automobiles, although they always have found a way out of their problems in the past.

[@martijnkosters9024]

Clear message. Finally someone mentions that it is not 'a stalling EV market' but really just a manufacturer making mediocre products.

[@midnight4109]

That has always been my feeling although their colt following has always bailed them out. Now it seems that there is a lack of interest in their cars.

[@tonyb3629]

Maybe it's actually because electrification isn't neccessarily the future. Maybe a significant majority just don't want EV's. When governments got involved in what was a free, open market you knew things were going to get bad, but not this bad. The fact most car-makers electric products are just woeful doesn't help.

[@Foersom_]

@@tonyb3629 found the boomer! There is a climate crisis, we can not continue using fossil fuel for cars. That is why we need to change to EVs.

[@vincentcausey8498]

The EV market in Germany has collapsed. In the UK manufacturers are rationing petrol cars to meet the quotas - and that's after holding back EVs to customers in the last quarter of 2023 and delivering them in 2024 instead, in order to artificially inflate 2024 sales. Don't believe the hype.

[@dquzmanovic]

EV or not, fact is that they are simply not competitive.

[@MightySteve001]

Great analysis of VW's problem but it doesn't help if the company owes $192 billion in debt. The company may go into Liquidation.

[@Marco-zt6fz]

Thats will be not nessary into Liquidation. When you see where all hold the shares. Porsche Automobil Holding SE, Stuttgart, held 53.3% of the voting rights. The second-largest shareholder was the State of Lower Saxony, which held 20.0% of the voting rights. Qatar Holding LLC was the third-largest shareholder with 17.0%. The remaining 9.7% of ordinary shares were in free float.. But VW wagen has to sell some companies without selling some companies will be VW History. But they can doing the trun around. VW build realy good cars, but they have to change the philosophie and the speed to build cars. The Problem is also the german poltics its not only mangament problem but also.

[@thedualtransition6070]

@@Marco-zt6fz If they can't pay their debts, the creditors will put it into liquidation over the heads of the shareholders (who will get wiped out).

[@midnight4109]

@@thedualtransition6070 Nah, too many assets.

[@johnharvey1786]

Thats not true debt. VW operates as a bank via VW finance on car purchase finance. If you also look at the other side of their bank balance it more than covers this. They also have a large gap to cover non payments and they get the car back to sell on anyway for non payment. It like saying every bank who has lots of mortgages out to customers is not going to get paid back at all and go bust. Germany is not going to allow VW to go down with 120,000 of their 684,000 worldwide staff working there. Germany is having serious budget issues following their massive reduction in oil and gas imports from Russia, and having to get fuel imports from elsewhere, having to subsidise this and trying to restructure their energy systems and this is taking time to work through, so Germany has stopped EV purchase subsidies, not surprisingly reducing sales, but to allow VW to go down would be politically crazy.

[@yo2trader539]

The more cars automakers sell, the more debt they will have on their B/S, because automakers borrow money (or issue debt) to lend to consumers in the form of auto-loans. Thus, VW and Toyota have large debts on their B/S but they also have large car loans as assets, which is why their credit ratings are generally stable and good. They usually make a small interest rate difference from their financing division.

[@rosomak8244]

The problem is that the current offering is too expensive. The EV as waaay too expensive for normal people.

[@LouDeVere]

Absolute rubbish. Not here in Australia anyway. We already have parity and considering the benefits of EVs over ICE on so many levels inc emissions and therefore health, we're way ahead with electric ownership. Even if an EV was 20-25% more than ICE, I would buy an EV every time.

[@LeicesterMike]

Structurally VW are dead, the German way of working on design and build is just not suited to this challenge.

[@contra_plano]

They own say that

[@manuelbarreto7032]

It's not only about German culture, it's because to such endevour you need a direction that comes even from central goverments. The EU is being sacrificied by USA to weaken China. You obviously can add the german cartel mafia as well of course...

[@oceanwave4502]

I have an unpopular opinion: Germany falling into this situation has something to do with their aging population. The elderly don't want to work more, don't like risk, accept whatever it is, don't like anything new (like our grandparents), are much less energetic and forward-looking. This situation happens also in Japan.

[@LeicesterMike]

@@oceanwave4502 it may have something to do with age it might also have something to do with over confidence.

[@progaminghours3854]

The change is bad.. soon ppl will realize the importance of quality in cars.. gimmick tech on cars rn are a trend .. soon they’ll fade out

[@GaryJohnWalker1]

Diess' sacking was the big step down for VW - errors were made especially with their software but that was fixable. By now the ok id3/id4 should be two thirds the price and good products like the id7 and bus should be coming off the lines in massive numbers and cheaper prices.

[@jasonmugridge]

But VW don't really want to sell them to us as they loose money on them and don't make as much from servicing. They should of bought out a proper EV years ago, with full software integration, and ironed out all the teething problems with a small scale production. The problem now is they have to bring them out for the mass market and when they get an issue its a bit one, as in the ID3 launch.

[@Foersom_]

However Diras were also manager over adding touch buttons, cheaper plastic and pushing car out before software ready.

[@__patriot_1776]

@@Foersom_ i also hate touch buttons, but you gotta innovate, adapt to the latest technology to compete with other automakers.

[@osamagazal6028]

German cars lost thier favours the moment they decided to reduce quality while at the same time hicking thier prices

[@trevorhartley5166]

Any decent range transporter size van in the pipeline for UK

[@winfriedtheis5767]

Thanks Elliot! Well put! Other brands like Renault and Hyundai have understood and are bringing exciting small and more affordable EVs on the market. But even the other brands within the company are doing a better job based on the same platform, like Cupra with the Born, or Skoda with the Enyaq! It would be great to see the ID.2all really coming out next year, despite it not looking very exciting, but if priced in Europe around the €25k mark it could save the day. And for China, I believe they should listen to you! ;-)

[@kneekoo]

VW deserves to go under, even for the single fact that they removed Herbert Diess. He had a real shot to put the company on the right path, but they were idiots. They deserve what's coming.

[@midnight4109]

I don't know much Diess although the company sees to have taken a turn for the worse.

[@kneekoo]

@@midnight4109 Diess was fired for being very aggressive in his transition to EVs. He was also friends with Musk, which was probably not seen as a good thing in the backward thinking management at VW. It's a pity that VW could've been stronger by now, but they removed Diess and bet the company's future on the dying ICE technology.

[@EfieldHfield_377]

Problem with VW and auto makers in general is simple. Price sells cars. They are just too expensive.

[@leifvieri4372]

VW in Sweden: ID.4 down by -72% in August, compared to last aug. Price remains at €45.000... in Germany now €36.700. Nothing happens and VW more look like they dont want to sell their EV's, at least not here.

[@rjbiker66]

BYD sales down 50+% in august in Sweden.

[@Foersom_]

They are deferring EV sales to 2025 because tighter EU emission rules they need sales in 2025, they have sold enough in 2024.

[@petergrant6484]

A reimagined Mk 1 Golf EV. Now there's an idea. After driving VW Golfs for 25 years, I've recently sold my GTE for a Polestar 2 SM LR 24MY. No regrets.

[@henvan8737]

Great to voice this message. I keep discussing this with my friends but they just can't see it coming.

[@LouDeVere]

Hi Elliot. Thank you for this insight. It's good to see you - like The Electric Viking here in Australia, telling people the truth about what is happening with regards to the rise of EVs in the world. The nay sayers, those who cannot see the future even when it comes up and slaps them hard around their faces. The idiocy of the Japanese car leadership and Toyota in particular, with their ignorance regarding hydrogen powered bombs, sorry, I mean cars - unless you're in Russia or Ukraine. We are so lucky here in Australia to have basically an open door policy with regards the latest vehicles coming out of China. We no longer have an auto industry - Holden being the last to close down around 5 or 6 years ago. They closed because they didn't innovate and became far too expensive to produce here. Totally agree with you regarding collaboration with Xpeng. If people cannot see the future now with EVs being the dominant means of propulsion, then they need to crawl back under their rocks as the world will change and move forward without them.

[@lm3718]

Hi Elliott, your analysis is spot on - I love the frank advice with suggestions for how to get out of their dire situation. From my point of view in Australia, VW has always been overpriced and the dieselgate scandal wrecked their reputation. Is there anything wrong with car production shifting to Korea and China? - I am up for it. A couple of other observations. People that say Chinese quality is not there are deluded. I do like Renault offerings - your point on leveraging European legacy is well made.

[@Rubicon365]

In Malaysia, VW dealership are crap.. slow service, no parts, no courtesy car, expensive maintenance etc... they are going down hill.

[@__patriot_1776]

Same in Sri Lanka, the only VWs (2000-present) in Sri Lanka are the Passat sedans used by higher posts of the Sri Lanka Army. Our government was planning to build a Volkswagen factory in NW province, but unfortunately couldn't because of the emission scandal.

[@nizamaris7896]

Hope it won't happen. The Union Workers are aggressively against it. The state of Lower Saxony may step in. To maintain the long shot is maybe a China based brand will take a stake in VW brand. Tough time for CEO for VW brand Thomas Schafer. I knew him when he was VP at DiamlerChrysler and then he moved to VE as VP production at VW Pekan. VW Pekan will be made ASEAN hub if they close any one factory in Germany

[@jasonmugridge]

Elliot surely we should be thanking VW for helping China in its transition to EV's and Chinese car manufacturers in general. If VW hadn't kept selling the Santana from the 1980's, until 2022, the Chinese consumer wouldn't of been quite as keen on EV's or looked for other new brands with 21st century technology. So I think we should give VW a big round of applause for all they have done for Chinese EV manufacturers, well and Tesla I guess.

[@Streamerabi]

Lmao, I'm not sure whether this is sarcastic or not, but this is one hell of a good comment either way 😂

[@hanfucolorful9656]

Germany should ask BYD to build factory in Germany, very much like Santana some 40 years ago in China. Win Win.

[@tg8199]

They are talking about the opposite in Germany, it is like 'we double down on combustion engines now, EVs just got us into trouble' it's crazy

[@teoengchin]

If they're closing factories in Europe, wouldn't losing local market share be a more direct cause?

[@Mladjasmilic]

Main problem with Volkswagen is that they do not make Volks Wagen any more.

[@yadpatrus9261]

my best advice to VW is that they start converting any ICE car into EV by being craetive with ev conversion kits for every vehicle in the world and to make it fit for the new electric era especially by creating new cheap and environmentally safe batteries, and owning reliable Car charging stations.

[@makaheng]

Great analysis Elliott, a business lesson for everyone, if VW survive, it'll be by giving us the consumers what we want via smart thinking, innovation n speed of launching cheap exciting models, not by delaying the inevitable.

[@MartDeursloten]

20 years ago the board of VW waved every inovation on ev's of the table. It is they're own fould

[@christophreuter9572]

Exact the time when the chinese started their EV strategy.

[@MichaelMartinussen]

Intelligent but a bit Geocentric upload :) Time for both East and West to focus on collaboration in all areas of existence :)

[@electricelliotrichards]

agree - collaboration is the way forwards

[@MichaelMartinussen]

@@electricelliotrichards Thanks for your answer Elliot and all your enlightening videos :)

[@petersmith6520]

And the UK is nowhere. No idea how the UK will make a living in the 2nd half of this century.

[@steverichmond7142]

VW group and other German companies were never good at making cars - they were VERY good at telling customers how good they were at making cars.

[@موسى_7]

Old BMW fans will disagree with you.

[@amandagrant4331]

Totally agree

[@midnight4109]

I at least give them credit for bodies and suspensions. Back in the day when cars were lackluster they made a name for themselves. The market is moving way too fast for the German nameplates to stay up.

[@glynnwright1699]

Beamers in the 80's were pretty nice to drive compared with much of the opposition. The straight six engines were smooth and reliable, styling was classy for the period.

[@steverichmond7142]

@@glynnwright1699 I owned 3 and they all broke down. They cost a fortune to fix. Only one was the engine - it was mainly the over complicated transmission and gearboxes.

[@mingouczjcz3800]

Too late. Behemoth legacy automakers like VW and Toyota have innate difficulty to timely adapt to the new EV challenge.

[@albertoporras04]

One major problem are the labour unions. EVs should be cheaper than ICE. Yes, the batteries still quite expensive, but the much lower degree of mechanical complexity in the car overall should counterbalance that. However, much of these saving from lower mechanical complexity come in the form of refuced labour input. You cannot build competitively priced EVs if you have to pay for batteries but you still staff your production with the same levels of labour as you would for an ICE production line.

[@dcasteaux9181]

Why are they closing German factories ‘because of China market share drop’ and not their Chinese EV factory? Or is it because demand has dropped because private buyers are shunning EVs and there is also a glut of unwanted 3 year old end-of-lease EVs flooding the market? AutoTrader UK has 2 year old unsold EVs with 11 miles. They have sold Audi eTrons unsold after 425 days.

[@experimental_av]

The latest Audi they pre-teased for release this year and shipping in H2 next year seems like a good example. A full year between release and delivery. I’m just an outside observer but it seems like Chinese EV makers are keeping the time between release and shipping very tight. Sometime in the same week. With the quick releases why would anyone pre-order a car to get a year later?

[@electricelliotrichards]

This is exactly what the market is noticing too. Spot on.

[@davidboskett5581]

The problem is solely down to the fact that producing EV's is not yet profitable for VW and all the other OEM's.Even Tesla has not come out with a lower priced car that is suitable for the mass European market. The only EV's that are price competitive with ICE cars have a small battery giving them a limited range.

[@damonleigh6045]

Well said Elliot, Spot on!

[@FPV_Luke]

This is the best time to buy a brand new VW Golf 8. This is exactly what I am doing right now in Poland. I am expecting 25 discount from the base price.

[@colorzeppelin]

Electric cars must come with a pan European plan for clean cheap energy as well a long term investment in battery technology, both owned by European taxpayers. That plan doesn't exist because of European austerity, imposed by Germany on the periphery, which has now come back to bite at home (as it was always intended to) NO VW cannot innovate fast enough as you say Elliot, because it's not on them. This is systemic, and the longer we blame corporations for not being good enough, the longer it will take to change course.

[@Foersom_]

EU has funded battery development, production and battery recycling in EU. It is on the way. You can complain that they did not start earlier.

[@Raymaster7482]

True - VW has a problem in the Chinese market but I doubt that they'll have big problems in Europe in the next few years. The brand is strong whereas most ppl won't buy a Chinese car they don't know especially since the prices aren't that much different to other manufacturers. Cars that are ~40k in China cost around 60k here.

[@ensteffo]

VW will relatively increase in price in the European market as other manufacturers relatively decrease. Unless they do something to reverse this trend obviously this will effect sales.

[@jasonmugridge]

The fact that VW's Chinese sales have effectively been subsidising the European one's for the past 20+ years and that this is now coming to an end will mean massive problems in Europe as well as China. Now throw into the mix the competition from Tesla and also the Chinese manufacturers turning up on Europes shores and it looks like their problems are only just beginning. Out of interest last year the ID3 was just €15,000 in China.

[@Streamerabi]

Thanks to tariffs that benifit literally no one. Consumers are catching up on how well Chinese cars are built, on top of their innovation and standard included features, instead of car manufacturers like VW and Audi that charge thousands for the most basic ass feature that should've been standard equipment. I think that small discounts, rather than substantial monetary incentives, could already take scepticism out of the way for these Chinese brands to flourish

[@AdiSuffian]

@@jasonmugridge Spot on, with cash cow as good as gone, they need to find another cash cow and milk it, but where is the next cash cow?

[@johnharvey1786]

Agreed, despite what was stated in this very odd video VW Group has more EV models on sale than any other manufacturer including the Chinese. VW have been slow in bringing out a small Polo sized EV but the rest of their range from the VW id.3 upwards covers most sectors and the new Audi Q6 is certainly not lacking in technology (I had a test drive two weeks ago and it’s very good). It’s true that all legacy car manufacturers, in Europe, US and Japan are going to have a fight on their hands through this transition but it’s hard to see the politicians letting China take over such an important industry that would cause serious economic problems if this was to happen.

[@gregculverwell]

Germany has become a very expensive place to design, develop and manufacture. On top of that is the fact that they are not very good when it comes to software. Also the Germans like to outsource the electronic modules to a number of different manufacturers for just one car, each if which write the software for that module = inconsistency. We all have seen the incurable glitches in the ID range of cars. EVs are like the cell phones of yesteryear - rapid iteration. The old way of taking 3 years to develop a new model just doesn't cut it.

[@rlm5834]

One advantage VW has is they have known this situation for some time, they have the technical depth and following to transition to the new automotive scene. They were early in EVs for a legacy manufacturer, and are now working on second generation EVs. Most legacy manufacturers are in worse shape than VW.

[@Random-es7yo]

Will be interesting. Sales seem to have flat-end out at about 15 - 20% of vehicles sold in 22 / 23 / 24. I imagine the slow charging issues with the current generation of batteries will remain a drag in the UK for a few years. Maybe have solid state batteries by 2030. Although upgrading the grid to cope is probably a bigger issue.

[@nzoomed]

And here I was thinking that VW had actually put out a great EV platform that was seen across all their brands.

[@manimalworks7424]

Honda Accord MSRP is $27700, but discounted to $16500 to be able to sell.

[@jackbleiham8475]

Where Where

[@manimalworks7424]

@@jackbleiham8475 in China

[@GForce162]

@@jackbleiham8475 China

[@robhaitch5544]

Are Tesla moving too slow in China too ? You say new models every 18 months - Tesla are hopeless in that regard.

[@GForce162]

tesla sells not cuz of car itself-- it's musk's marketing

[@emilsohn1671]

Tesla still have by and far the best software. Recently, Bjørn Nyland on KZbin broke the efficiency record with Tesla 3 at just 110 wh/km at 90-100 km/h. That is absolutely crazily good efficiency and shows Tesla still have a fundamental technological advantage. No other mid-sized sedan even comes near this efficiency, not the chinese either. BYD seal consumes nearly double the electricity per km driven. No doubt Tesla will be challenged by China, but their cars are still good tech-wise, the software is the best and the efficiency is just next level.

[@emilsohn1671]

This kzbin.info/www/bejne/pGSVZJ-OaLOIgas This is what Tesla can do that the chinese still cannot. Perhaps they will be able to soon. Who knows. But in Europe, BYD Seal has disappointed somewhat on its efficiency. Same with the MG4, and Volvo EX30. They are not great in that regard. It is plausible that we are not getting the good EVs from China, I won't be the judge of that.

[@fredhearty1762]

VW acting 'quickly' and 'decisively' is the success formula for 2020. They've recently moved their next generation EV platform 'Trinity' to 2032 (!!!). VW and most legacy automakers have now lost China and 'Rest of the World' is right behind. VW needs to formulate a role as a bit player that remains profitable with 10-20% of its current production.

[@BearMountainRancher]

VWs demise has nothing to do with the sky rocketing energy costs in Germany and the EU.

[@mudi2000a]

Raising energy costs are partly political. They want to have the cake and eat it too. They must bring down electricity prices. Instead they tell you to just install solar panels which many people can’t do or can’t afford.

[@ezeJeff]

I agree with you but outside of the EV sphere 27 is a worry

[@phils4634]

The short answer is "No", and that also applies to the rest of the German and EU car manufacturers. It is VERY likely that many of these "Household Names" will be entirely Chinese-owned in the next five years, since in the EV market alone, Chinese companies are reducing the development to market time to around 12 months NOW, and their home-grown products have already gained a very high level of market acceptance (so many are already regarded as a "Quality Brand" on a par with the EU / German "prestige" Brands. The far lower maintenance costs (= lower ownership costs) helps to re-enforce the Chinese (and others') perception

[@amjedali5164]

VW group including everything they own from Porsche to Bugatti CHINA makes up 60% of their profit. Any company losing 60% of their profit is a disaster, yet a company in $190 BILLION in DEPT which is huge. Pakistan a country of 245 million people with is growing has a DEPT of $130 BILLION and it keeps getting called unsustainable. (VW group under AUDI joint venture manufactures cars in PAKISTAN).

[@rogerhammett5295]

Rubbish!!!! substandard electrical systems, cheap and nasty connectors, stupid multiplex systems, good business for auto electrician,s and master technician,s.

[@rogainstruments9273]

It is yet to be determined how long this Group will be able to meet its company pension obligations with this business model.

[@hsingchen321]

VW has invested in the SSB(solid state batteries) development by QS(QuantumScape) and recently has acquired licensing of SSB technology from QS. SSB is expected to solve LLIB(Li Ion Batteries) problems(1) catch fire (2) short driving range (3) long recharge time (4) lose power in winter (5) short battery life(80,000 miles). Both CATL and BYD are behind QS in commercialization of SSB by 2 - 3 yr. VW has the clear opportunity to beat BYD if it put $ and engineers efforts on speeding up commercialization of SSB.

[@chris52386]

VW should have listened to Herbert Diess instead of getting rid of him 🤔

[@grahamf695]

There is a missing part to your analysis: why have VW been unable to keep up? I suggest there are several reasons. 1. VW is just too complex a company with too many bands and models. 2. They are adding further complexity to their business model by partnering with SAIC, Xpeng and Rivian. 3. They are not good at writing software. A year or two ago, they fired a development team of thousands of developers. 4. They have not focused on minimising manufacturing costs - e.g. gigacasting, robotics, keeping the design simple - as Tesla and Chinese manufacturers have done. 5. They are tied up in knots by protectionist German labour laws and contracts promising not to make staff redundant. 6. Their senior management are unable to find a strategic direction and stick to it.

[@stuartmbrown66]

It's sad but true, the writing has been on the wall for years but all your Fords, Toyota's just sat around thinking they were too big to fail. Id rather not be buying Chinese cars, but I don't want to pay a premium for 2nd rate products.

[@erich623]

Elliot I don't think VW wants to highlight the "people's car" moniker. Do you know which people's this originally refers to?

[@rickylefleur2158]

Elliot, that throw away thinking when it comes to cars ain't in the german dna. Cars are build to last, when it comes to ev's nothing is there to last (at least atm)

[@Imperial_Dynamics]

Here in Greece I see MANY new Skoda cars. Skoda is a VW subsidiary.

[@miguelmarques7331]

Absolutely right! 👍Spot on🎯 Hope it does not expand to other german brands like Mercedes & BMW.

[@paulbo9033]

The People's Car 🤣 VW absolutely DO NOT want to focus on their "heritage". Especially the bit around 1939 - 1945 👀

[@othmanmajid6380]

THAT is the German problem...the Third Bike lasting a thousand years....the DNA needs tweaking with immigration from😢😢😢😢😢

[@Flyingtwiglet]

What about Ford?! Just launched their second EV!!! Miles behind. At least VW have a suite of good EV’s of all sizes. I agree that innovation in legacy manufacturing is way too slow. Tesla and Chinese manufacturers have shown that innovation and fast decision making in production provide efficiency and more competitive pricing.

[@Foersom_]

Second EV? Mustang, F150 Lightning, Explorer, Capri and they also have an EV van.

[@Flyingtwiglet]

@@Foersom_ in the UK, The Explorer has only just started shipping, the Capri is not available yet and the F150 is not available to us. The Transit yes. In Europe VW have the widest range.

[@EastWood2004]

Is it risky to buy another expensive ICE car like BMW M3?

[@navajyotichetia8968]

German (or any other organised manufacturers) can focus their brilliant people to a problem- the Chinese can focus thousands of brilliant minds from everywhere to bring brilliant idea's from everywhere and scuttle the competition

[@ristekostadinov2820]

I wonder why do they bother so much developing diesel cars, double down on plugin hybrid with 6-7KWh LFP battery (they're affordable) as a bandate solution and abandon developing new diesel engines that satisfies current and future emission standards that will unlock billions of euros capital for investment in EVs. The sell for diesel engines was "it's more expensive at start but with time is cheaper than petrol" however to be compliant with emission standards it require so much hardware, maintenance/repair of modern diesel engines is more expensive + fossil fuel have been going in Europe on upward trend for over a decade.

[@Foersom_]

7 kWh is to little for PHEV. You need 14 kWh (~50 km) or 20 kWh (~80 km).

[@marvinfok65]

German cars were like the Nokia, Blackberry phones while the Chinese had move on to be the smart phone generation.

[@jakobcreates]

They are done for. Constant spreading of doubts on electrification by politicians in the home market is not helping either.

[@sbillows]

This is a breath of fresh air compared to the host of petrol-head videos complaining about EVs and how they will never achieve mass market penetration. Over in China you can see the future coming to pass now, rather than in Europe & the US where people seem to be stuck in the past and can't seem to imagine a future that is substantially different. I'm an engineer who started working in the automotive industry back in the early 90s and new brands coming into the global car market are nothing new. The old brands were seen as cumbersome and slow then, and although they have improved they are still dinosaurs that are too wedded to the old way of doing things. For those people who don't realise it, EVs *will* be the future as they are just a better technological solution as they are simpler, more efficient and much easier to maintain. Sure they're not perfect now, but in 10 to 20 years time virtually everyone will be driving them as they get cheaper and batteries and charging infrastructure vastly improve. It's very similar to people demoaning electric/diesel trains replacing steam trains in the 1950s. I personally love stream trains, but they are no way suited to the modern world. The same will be be true of petrol & diesel cars in 20 years time. We will look back at the mid 2020s and laugh about all the people pontificating about how rubbish EVs were and that they will never replace their beloved oil burning, noisy cars.

[@andrewlau9873]

VW probably is one of the first auto company into China. Obviously VW and other European and U.S. brands made billions in profit over the last 30 years. Elon laughed at Chinese cars back in 2012, but now sees them as threats. Personally, I saw the trend or tide turning in a subtle kind of way. Chinese TV series and movies featured a lot VW, say 20 years ago. Then they features Audi, BMW. Later on, Americans cars were featured. When China became rich, TV series and movies started to feature Porsche, Rolls-Royce, Bentley and Ferrari. Suddenly in the last two years, Chinese EV are featured everywhere in TV series and movies. Legacy auto executives are paid millions to observe these trends. My question is simple. “What the fxxk have they been smoking?”

[@zman4444]

Man for last 20 years I was always commenting on “German Engineering” nonsense. We had few German business partners, they NEVER listen, it’s always they way or highway. Hey NOKIA & Blackberry here we go again.

[@peterbunker7165]

Good analysis, I think you're right.

[@PilliBisiklet]

VW doesn't necessarily need to launch a new car every 6 months. Tesla doesn't release a new model every 6 months, but it's still successful

[@teslapower18]

It was great plan to fire Dietz as CEO😂😂😂

[@RoryMcDuff]

By the time VW markets its car in 2026 the Chinese will be marketing their airborne EVs ...

[@balkanleopard9728]

German auto manufacturers are trading on their 1960's / 70's reputation. During recent servicing of my ev for an elusive, but persistent, access issue, I mentioned the troubles I'd had over the years with VW vehicles. The service manager laughed, VW reliability has been a joke for years. The Germans are starting to emulate the British - and just look at that mess. If you don't hold true to your promises, eventually a badge is just a badge.

[@willeisinga2089]

Herbert Diess was fired. Volkswagen Lost. Mercedes Audi Opel BMW will be the larger Shift. BYD Seagull EV Car cost 10.000 dollar. Wuling Bingo EV cost 10.000 dollar. Good Price Good Quality. Worldwide.

[@Call-me-James]

The Achilles heel for VW is software. I saw an interview of the guy who is in charge of VW's software - and he didn't seem to be very bright. Steve Jobs, Elon Musk, Larry Page, and Sergey Brin knew that their software engineers had to be geniuses. VW hasn't figured this out yet.

[@stevewhitmill2037]

Great vid, Elliot.

[@petersmith6520]

EVs are awful. I will only own an EV if someone gives it to me

[@monkeysuncle2816]

I know I'd buy a VW if they re-released the Karmann Ghia, in either ICE or EV, but preferably EV.

[@benedictchin5261]

You should be charging VW $7m for that "advice", just like the usual fee for Sweet Baby Inc.

[@lynnwandering581]

ouch, pretty sure you are my fellow Chinese😂

[@benedictchin5261]

@@lynnwandering581 overseas Chinese from South East Asia......

[@luxuriosdetail386]

😂😂

[@pangtianran110]

a mode change within VW in 6 month? lol they can't get the organization chart approved during that time

[@paulc6766]

VW are never going to be able to do what you say especially as they have wasted 10 years already.

[@LawpickingLocksmith]

Lol, comrade Scholz showing off with his darling Baerbock...

[@theinfralink6598]

Now we know how much money the legacy automakers were making in China and all the time they were very arrogant and jacking up prices.

[@razvanyke]

Nokia, anyone? 6230i, 3310, 6310i were the best phones .. until iPhone 3G came along. Then Nokia brought Symbian and ciao ..

[@oxidalpha6350]

Yeah ciao because iphone was the better phone not because iphone was the cheaper one. The chinese dont have better ev cars with better charging or better range. Mercedes eqs still has one of the best ranges and was developed 6-8 years ago. The same wirh edficiency. The well known chinese brands like xpeng dont even come close to these ranges. Its just chinese people buy chinese brands.