- This topic has 21 replies, 10 voices, and was last updated 2 years, 9 months ago by
.
- Topic
‘Strong customer reluctance’ forces Volkswagen to slash electric vehicle production
The Telegraph Friday..
Volkswagen is to cut electric car production at one of its biggest factories after “strong customer reluctance” led to far lower sales than expected.
The business is pausing work on electric models for six weeks at its plant in Emden, northwest Germany, and will lay off 300 of the 1,500 workers involved in making them.
The company blamed lower subsidies for buyers of the cars across Europe and higher inflation for a drop in consumer interest.
Demand for electric vehicles is running 30pc below the company’s forecasts.
Manfred Wullf, head of the Emden plant, said: “We are experiencing strong customer reluctance in the electric vehicle sector.”
While uptake of electric vehicles has been strong in the past few years, with demand for the cars outstripping supply, manufacturers fear that they are becoming less attractive owing to the extra expense of buying one – battery cars cost about £10,000 more than petrol-driven equivalents – together with a narrower gap between the price of electricity and petrol when filling up.
Customers were sold on a high upfront cost which could be recouped through cheaper charging. But Russia’s attack on Ukraine has pushed up natural gas prices, leading to spiralling electricity cost. Meanwhile petrol prices have eased in recent months, narrowing the advantage.
At Volkswagen, production for the new ID.7 saloon car will be pushed from July to later in the year
Volkswagen UK said: “The Volkswagen brand, like other car manufacturers, is currently seeing softening demand for electric cars. Reasons for this include: reduced subsidies, higher inflation and recent longer delivery times due to the shortage of parts.
“We are confident that demand for all-electric cars will pick up again as the year progresses. With the extensively revised ID.3 and the new ID.7, we continue to launch attractive new models.”
Volkswagen understands that it must join the price battle for electric cars and in March unveiled a prototype, the ID. 2all, costing less than £22,000 (€25,000) yet with a range of up to 280 miles.
Volkswagen boss Thomas Schäfer also committed to an even cheaper model costing less than £17,500.
- Replies
‘Strong customer reluctance’ forces Volkswagen to slash electric vehicle production The Telegraph Friday.. Volkswagen is to cut electric car production at one of its biggest factories after “strong customer reluctance” led to far lower sales than expected. The business is pausing work on electric models for six weeks at its plant in Emden, northwest Germany, and will lay off 300 of the 1,500 workers involved in making them. The company blamed lower subsidies for buyers of the cars across Europe and higher inflation for a drop in consumer interest. Demand for electric vehicles is running 30pc below the company’s forecasts. Manfred Wullf, head of the Emden plant, said: “We are experiencing strong customer reluctance in the electric vehicle sector.” While uptake of electric vehicles has been strong in the past few years, with demand for the cars outstripping supply, manufacturers fear that they are becoming less attractive owing to the extra expense of buying one – battery cars cost about £10,000 more than petrol-driven equivalents – together with a narrower gap between the price of electricity and petrol when filling up. Customers were sold on a high upfront cost which could be recouped through cheaper charging. But Russia’s attack on Ukraine has pushed up natural gas prices, leading to spiralling electricity cost. Meanwhile petrol prices have eased in recent months, narrowing the advantage. At Volkswagen, production for the new ID.7 saloon car will be pushed from July to later in the year Volkswagen UK said: “The Volkswagen brand, like other car manufacturers, is currently seeing softening demand for electric cars. Reasons for this include: reduced subsidies, higher inflation and recent longer delivery times due to the shortage of parts. “We are confident that demand for all-electric cars will pick up again as the year progresses. With the extensively revised ID.3 and the new ID.7, we continue to launch attractive new models.” Volkswagen understands that it must join the price battle for electric cars and in March unveiled a prototype, the ID. 2all, costing less than £22,000 (€25,000) yet with a range of up to 280 miles. Volkswagen boss Thomas Schäfer also committed to an even cheaper model costing less than £17,500. https://www.msn.com/en-gb/cars/news/strong-customer-reluctance-forces-volkswagen-to-slash-electric-vehicle-production/ar-AA1dfIEn?ocid=msedgntp&cvid=c97905d7fa38472baf734a850e4aa2c3&ei=24
Covered just that in this thread Video.
Interesting. I’ve seen this reported elsewhere as well. In addition to all the stated reasons for the fall in demand, I think that there are some other factors at play here.
The demand for EVs in recent years has been driven in the main by the lease market, primarily due to the company car taxation regime which heavily favours them. I think it’s also a safe assumption that the majority of those who have jobs that come with a company car probably have an off road charging solution, so it’s been a much easier decision to switch than it would be for many private buyers.
As has been widely reported (and referred to in this article as a ‘price battle’), EV prices are now starting to fall, lead by Tesla. Others will have to follow to remain competitive. The softening of demand is also affecting second hand EVs, which are taking longer to sell than ICE cars. All of this feeds in to a concern about residual values, which won’t worry lease customers so much (other than the poor chap on this forum who saw the AP of his ID5 drop by £4,400 just after he took delivery), but will be of far greater concern to private customers. EVs have very high retail prices and if you are buying one with your hard earned cash you don’t want to be worrying that the value of that asset may fall sharply when the manufacturer subsequently cuts the selling price! Depreciation is always the biggest cost in private car ownership, and that’s without this being turbo charged by price cuts.
Then, of course, there are all the issues about the public charging infrastructure which isn’t growing at the rate required to meet the anticipated demand. In spite of the demand issues, I was surprised to hear that the number of EVs on the road per public charge point is actually rising in many areas, not falling as you would expect.
Doubtless there will be some calls for subsidies, but I’m dead against those as they only ever benefit the manufacturers by subsidising inflated prices. Look what happened when they were removed or reduced last time – the manufacturers cut their prices! Always best to let sales be governed by the market – good old supply and demand. If the demand isn’t there, prices will have to fall to create it and / or, as is also happening now, supply will have to slow.
I’m sure that this will be a short term issue and things will pick up again once the market settles down, but this is further evidence, if ever it was needed, that the next government will have to move the 2030/35 deadlines – and not just by a year or two!
They’ve just been discussing this on Sky News.
Whilst BEVs continue to see the biggest % growth (as you’d expect), they still only represent 800,000 of the 35,000,000 cars on our roads and only 17% of new vehicle sales are currently BEVs. You don’t have to be very good at maths to see that the 2030 date has to change significantly.
Some good news for the next government who has to announce this date change is that a poll today shows that only 1 in 4 people support the 2030 ban, so they will be pushing on an open door.
Add in that the ID.x series of cars has been particularly underwhelming, poor material choices making them feel cheap & shoddy infotainment, as well as the clanger of the touch sensitive controls & daft button choices. Their motor choices are a bit woeful as well, resulting in much slower cars compared to the competition unless you spend even more. If you were looking for a £40-50k car , the ID series just does not cut it compared to Tesla, Hyundai/Kia & Polestar. Even the MG4 wipes the floor with the ID.3 for interior quality and finish.
There will be a lot of this as buyers are looking at electric cars with a fresh perspective & not the “I always buy a VW ” mentality that has kept established manufacturers happy for decades.
I will probably be replacing my Soul EV with another electric car on the scheme next year, something bigger, but not the ID series as it stands, it’s not on my wish list at all.
VW cited the withdrawal of the German Govt subsidy & the German recession as the main driver of decline, stating EV sales in Germany this year will only be 8% higher than last year, a lower rise than they anticipated.
In life, it's not who you know that's important, it's how your wife found out.
Could VW issues, also be that the cars represent poor value for money, nearly all the reviews, i have seen, have been negative, especially on the id4/5. Poor quality materials, laggy software, not really a premium product at all.
Eg.
<p style=”text-align: center;”></p>And yes, I always thought there was a strong chance the govt would walk back on their 2030 deadline, it’s what govts do, be seen to do something big by X date, then water it down as the date approaches, citing whatever excuses come to hand.
I hope they do, I’m not an EV evangelist and I can see the problems we have with infrastructure, its not kept up with the planned numbers & falling behind more each year. Off site charging can be expensive, so that will put off a lot of those without the means to charge at home.
Not everyone, mind, my Son just bought an MG ZS EV, he lives in a flat and charges in a public car park near his work, he reckons it’s a bit less than his previous petrol costs for his 1.3 Duster. I was impressed with the MG’s quality, finish & ability on the test drive, much better than I thought it would be (see brand bias in post above!).
In life, it's not who you know that's important, it's how your wife found out.
Not at all surprised
I expected this big VW EV sales kick back after their honeymoon of churning out poor quality products that are ( I hear) not worth the money
Poor quality materials and iffy software make a poor marriage imo
Seems they need a BIG plan B if they are to survive the competition
The huge past compensation sums paid out from their subsequent profits may well be dictating their future paths
Whilst I am no great VW fan (I was quite glad to see the back of our last Tiguan) this issue about EVs not being embraced at the pace that manufacturers had anticipated is not unique to VW.
Not surprising as the first iteration of VW’s BEV were woefully poor. Given that is was their first foray into EV’s it is understandable.
But yet, EV sales are increasing at pace. ICE cars are diminishing in numbers drastically. You can see
how there are practically no Diesel cars on the scheme. Petrol variants are next to go.
Yet, there are still, probably the older generations that cannot handle change who reckon that they have a choice with ICE vehicles. It is NOT going to happen.
All vehicle manufacturers have ALREADY commited to ZERO ICE cars and full BEV’s in a handfull of years.
You do not need to be an economist to understand where petrol sales are going.
As demand dwindles, petrol is going to get very very expensive, very soon. The price will increase exponentially the closer to 2030.
What people do not understand is…the days of propelling a vehicle using an ICE are gone. they just DO NOT realise it yet.
Then there is the other elephant in the room. The Govt is going to lose a huge source of income from fuel taxation. Expect higher taxes, to make up for the lost revenue. Probably an extortionate type of road tax.
After all, the Govt wants you to use public trasport rather than your own vehicles.
I know you think you have a choice in the move to EV’s….but really…you do NOT.
This is not about EV’s as Tesla have recorded record sales. It’s about over priced poor quality EV’s, they need to reduce prices.
https://www.bbc.com/news/business-66083329.amp
Enyaq EV
It shows when VW’s “Cheaper” partner can produce a car that’s substantially higher quality than their offerings. The ID4 and ID5 are, when compared to the Auid Q4 AND Skoda’s Enyaq, poor. Build quality, ride quality, materials, software, they’re all sub par on a car they’re trying to sell for 50 grand. When you look at the £35,000 Enyaq IV 60 and compare it to the ID5 you can see why people aren’t jumping on board.
Then there’s the whole cost of living thing. With prices trying to remain so high and inflation hurting those of us they’re hoping will buy their cars, a lot of people will make do with the car they have for another year or so, just to see out the ‘difficult’ period.
Then there’s the whole nonsense that surrounds the whole EV market, where papers like the Telegraph and certain social media outlets will happily spread complete nonsense, untruths and rumour just to delay the inevitable.
Add in infrastructure issues and silly high prices for rapid charging and we’re getting close to seeing why EV sales aren’t booming here. At 25p per kW rapid charging was still cheaper than fossil fuels, at 65p it’s close, when you get to 75p or even £1 then it’s very hard to justify paying over the odds and they paying the same or more for fuel and the lack of convenience of having to charge goes from something you can easily justify down to an annoyance all the way up to the final straw. It’s very easy right now to ignore all the environmental benefits when the costs just don’t add up as favourably as they were. Yes, if you can charge at home it’s still a bargain but if you’re only charging source is public and there’s no free charging from supermarkets or some car parks due to the prices companies are being charged for their electricity, so the days of owning an EV and running it for a penny a mile are, unfortunately, gone. Even if electricity prices return, I can’t see free charging returning.
It’s going to be a challenging time for a while if you already own an EV, it’s going to lose it’s value as new cars get significantly cheaper but, that needs to happen for the predicted parity between ICE and BEV prices.
I'm Autistic, if I say something you find offensive, please let me know, I can guarantee it was unintentional.
I'll try to give my honest opinion but am always open to learning.Mark
Unsurprisingly there is still a great deal of reluctence among private buyers when it comes to EV’s be the main reasons I would think being range anxiety and charging facilities especially if you can not charge at home, but the biggest issue is still the cost.
EV’s as someone as already stated make great sense for company’s as EV price can be offset against tax and charges can be fitted with substantial grants towards the instalation costs, for most employees its a no brainer B.I.K on a 40k EV works out at around £200 a yr substantially cheaper than Hybrid or ICE vehicle.
VW’s woes dont surprise me as they have lived on there reputation far to long, overpriced compared to many cheaper better alternatives.
This is not about EV’s as Tesla have recorded record sales. It’s about over priced poor quality EV’s, they need to reduce prices.
I think this is an example of where statistics can mislead. All manufacturers (including VW) will be selling ‘record’ numbers of EVs. The segment is growing by 31%, far more than other types of cars. This is not surprising given that 31% growth is very easy to achieve when EVs represent only 800,000 out of 35 million cars on our roads.
The issue is that this level of growth is significantly less than is needed to meet the targets that manufacturers will have been working to, which is just one of many reasons why the next government will have no option but to push 2030 back, probably by at least 5 years. The revised date could well move back in future years as well!
Tesla have had to make substantial price reductions in order to shore up demand and let’s be quite clear about this – no company slashes it’s prices like that if they could have sold them at the higher prices! Whilst they have hacked off existing customers, it’s a clever move. They are growing market share and will be forcing other manufacturers to take drastic action. Obviously this won’t be good news for those who have already purchased an EV privately (as they will get absolutely clobbered with depreciation), but it will make EVs more affordable in the future. However, as others have mentioned, price is just one of many current obstacles, especially for the tens of millions who won’t be able to get a home charging solution.
Telegraph is very anyi ev currently.
looking into the actual information, one line is being stopped and it only effects the I.d.4 and the new I.d.7
yes, I.d.4 sales are slow, but as we have seen with the I.d.3, the original interior is rubbish, especially compared to its sister cars, the Q4 e-tron, Enyaq and Cupar Born.
the I,d.7 is a brand new car and will be suffering from the normal gestations of a new car, parts shortages, changes to production process, parts being reworked, and modified.
Makes sense to stop that line and get the build right, plus, you never know, perhaps an interior facelift if the I.d.4
Article is a typical anti ev rant, with half truths and assumptions.
This is not about EV’s as Tesla have recorded record sales. It’s about over priced poor quality EV’s, they need to reduce prices.
I would say overpriced is one of the major problems, European car manufacturer are facing with their reluctance to lower prices, with many wanting to maintain these higher prices (Renault being another) I won’t go in to whether they are junk or not however, VW’s breed of electric cars don’t instill posh cabins as their ICE vehicles did, rather a bland big box little box theme!
Lithium ion battery costs per kWh have reduced from $731 in 2013 to $151 in January 2023, which saw a steady decline to $172 in 2019, $150 in 2020, $141, with a slight increase for 2022/Jan23 $151.
In comparison BYD and CATL cobolt free LFP/LFMP batteries in 2021 were $80 per kWh battery ($60 per kWh cell) Hypothetically that working out around $6400 per *)kWh battery pack, around the same price as compariable ICE engine. In comparison CATL’s 2nd generation semi solid state battery is around $136 per kWh, something Europe can only dream of making.
Its been said for many years now, once prices fall below $101 electric vehicles would be comparitively priced to ICE vehicles. However there is shortage occuring of the key raw materials needed to make EV battery cells which was responsible of a rising trend first noted in 222.3 figures. Even so manufacturers could have followed Tesla’s lead in reducing the price of their EV’s by a largish margin.
Telegraph is very anyi ev currently. looking into the actual information, one line is being stopped and it only effects the I.d.4 and the new I.d.7 yes, I.d.4 sales are slow, but as we have seen with the I.d.3, the original interior is rubbish, especially compared to its sister cars, the Q4 e-tron, Enyaq and Cupar Born. the I,d.7 is a brand new car and will be suffering from the normal gestations of a new car, parts shortages, changes to production process, parts being reworked, and modified. Makes sense to stop that line and get the build right, plus, you never know, perhaps an interior facelift if the I.d.4 Article is a typical anti ev rant, with half truths and assumptions.
Why when some don’t agree with or dislike whats written its anti this anti that?
Volkwagn as said themselves demand for its EV’s have not met their estimated targets and they are stopping production of the 4 and 7 and laying off around 300 staff. They did the same in 2020 and also layed f staff as part of a 7000 staff to go over the next years via retirement, redundacies, agency workers. So it mostly tallies with what telegraph has said.
You mention the id7 whils’t its a massive imrovement (but not class leading by a long shot) on their current carnation, Are they going to bring the design to the full line of EV’s they make I doubt it?
Volkswagon was one of the main leaders in bringing EV’s to the mass market in Europe but, China was leagues ahaed in BEV poduction and battery production, with them now recently starting to make semi solid state batteries something only Europe can dream of for a long time. Pehaps part of the reason they are allowing BYD and Catl to build massive giga factories.
Telegraph is very anyi ev currently. looking into the actual information, one line is being stopped and it only effects the I.d.4 and the new I.d.7 yes, I.d.4 sales are slow, but as we have seen with the I.d.3, the original interior is rubbish, especially compared to its sister cars, the Q4 e-tron, Enyaq and Cupar Born. the I,d.7 is a brand new car and will be suffering from the normal gestations of a new car, parts shortages, changes to production process, parts being reworked, and modified. Makes sense to stop that line and get the build right, plus, you never know, perhaps an interior facelift if the I.d.4 Article is a typical anti ev rant, with half truths and assumptions.
Why when some don’t agree with or dislike whats written its anti this anti that? Volkwagn as said themselves demand for its EV’s have not met their estimated targets and they are stopping production of the 4 and 7 and laying off around 300 staff. They did the same in 2020 and also layed f staff as part of a 7000 staff to go over the next years via retirement, redundacies, agency workers. So it mostly tallies with what telegraph has said. You mention the id7 whils’t its a massive imrovement (but not class leading by a long shot) on their current carnation, Are they going to bring the design to the full line of EV’s they make I doubt it? Volkswagon was one of the main leaders in bringing EV’s to the mass market in Europe but, China was leagues ahaed in BEV poduction and battery production, with them now recently starting to make semi solid state batteries something only Europe can dream of for a long time. Pehaps part of the reason they are allowing BYD and Catl to build massive giga factories.
Maybe because one of the main peddlers of misinformation and out and out lies has been the Telegraph, nearly as bad as the Daily Mail and Express.
You know me, I don’t mind people having views different to mine but at least base these opinions on fact. The habit of these to simply pass around already debunked several times does move you from a difference of opinion to believing some of the press is out to prevent the widespread acceptance of EVs.
Whilst EV numbers are not as high as forecast (and I always wonder about that statistic), it doesn’t mean they’re flat or decreasing. Uptake isn’t what they hoped, it’s like saying we wanted to sell a million Golfs and only sold 600,000. Any other period they’d be delighted with 600k but some idiot convinced the senior management that a million was not only possible but likely enough to base their budgets around. This is the problem with VW, they were convinced that the ID4 and ID5 would take off and would sell in units much greater than they actually have been, for all the reasons mentioned above, and they obviously budgeted and built their staff around those increased sales figures. When it works, everybody gets bonuses and nobody really notices, when it goes far beyond predictions then it’s a great year, however, when it doesn’t go to plan then it’s bad news. When the failure to move product is around an EV then bad news gets picked up by all the above press and it’s no longer bad news but the end of the “EV Experiment” or whatever other exaggeration they can whip up.
I'm Autistic, if I say something you find offensive, please let me know, I can guarantee it was unintentional.
I'll try to give my honest opinion but am always open to learning.Mark
Volkswagen’s problem is that many of their owners will end up killing themselves in VW’s range of EV cars.
They are so bland & boring that you’re likely to fall asleep at the wheel and crash into something solid.
They need to sack their entire design team and start again.
It’s quite simple really. Produce a poor product that’s more expensive than your rivals and people won’t buy it.
VW’s have been getting poorer with each model they bring out and that’s not just the EV’s.
Uptake isn’t what they hoped
Exactly what I said 2nd paragraph ?
I don’t think anyonyne on this thread has sad EV’s are flat ordecreasing, quite the opposite infact, however European maufacturers, EV’s remain relitively high priced, with a reluctance to to lower them when compared to other market manufacturers.
Have a read of my earlier post based on battery costs, if you havent done so as I think it will be of interest to you.
Volkswagen’s problem is that many of their owners will end up killing themselves in VW’s range of EV cars. They are so bland & boring that you’re likely to fall asleep at the wheel and crash into something solid. They need to sack their entire design team and start again.
That made me giggle to myself ?
You and @Elliot are quite right though with VW’s rather bland “big box little box” themed interior’s, that are light years behind that of their ICE car cabins – Tiquan, Golf etc.
- You must be logged in to reply to this topic.