Volkswagen & Ford vs. Tesla? Or Volkswagen & Ford vs. Toyota & Honda?
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Yes, the Tesla Cybertruck stole the thunder from Ford’s Mustang Mach-E, which was dominating electric transportation news for a few days, and it seems like ages ago that Volkswagen unveiled the ID.3. Nonetheless, as much as we want to know what the consumer demand will be for the Tesla Cybertruck, perhaps a bigger question is trying to figure out where Ford and Volkswagen are headed with electric vehicles. Tesla will be here, Tesla will sell EVs — a lot of them. What about Ford? What about Volkswagen? And which models and brands are their electric vehicle offerings really competing with?
Rumors indicate the Mustang Mach-E will get batteries from the large EV battery factory that sits very close to my home in Poland. That is an LG Chem factory and is the largest EV battery factory in Europe. Interestingly, that’s also where batteries for some initial Volkswagen Group models, like the ID.3, are being produced.
The Wrocław factory will reportedly have its production capacity extended to 70 GWh a year with production lines for the Mustang Mach-E’s battery cells added. However, note that the factory produces battery cells for many EVs — the continent-leading Renault Zoe, the Audi e-tron, the Porsche Taycan, the Volkswagen ID.3 and Ford Mustang Mach-E (if rumors are to be believed), and more. But I’ll get back to batteries in a moment.
So far, Volkswagen has presented a very convincing case that it is indeed trying to set the stage for rapid EV growth and that it aims to become the world’s #1 electric vehicle producer by 2025. The corporation is focusing on fully electric vehicles built electric from the ground. With the Mach-E, Ford appears to be on a similar path — putting in a serious effort to design an electric car that appeals to the masses, that is promoted heavily, and that could legitimately see more than 100,000 sales a year.
Word on the street is that we can expect perhaps 50,000 or 100,000 (depending on who you ask) sales of the Mach-E in its first full year, and presumably more in its second year as the vehicle catches on. That’s not a block-buster entry, but it’s more sales than most of the EVs sold to date have ever come close to achieving in a single year. 50,000 sales a year would be alright, and 100,000 sales a year starts to get interesting. Let’s hope Ford’s got plans in place for 100,000 a year and is dreaming of far more than that. A strong entrance into the EV market — especially if supplemented by a competitive Ford F-150 Electric offering — could quickly catapult Ford into another tier of the electric vehicle transition.
100,000 sales a year is again on the higher end of expectations for the Volkswagen ID.3. I think that would be seen as a moderate success. There’s much hope, however, that the ID.3 will compete with the Tesla Model 3 on sales volumes. But no one really knows how the market’s going to respond, and not many people know how many batteries Volkswagen has actually contracted — or could contract — for the ID.3. The pessimists among us are concerned Volkswagen is just rolling out the ID.3 and other electric vehicles to meet EU regulatory requirements, and will thus sell a small number until it’s forced to sell more.
Beyond the ID.3, Volkswagen has been getting tooled up to produce the ID.4 electric crossover in the USA, and also the VIZZION. While the ID.3 is aimed at conquering Europe, the ID.4 and VIZZION are what Americans will be offered. They are in prime classes for the US market, and while the media is inclined to pit them against the Tesla Model Y and Model 3, I want to see how many sales they take from the Honda CR-V, Toyota RAV4, Honda Accord, and Toyota Camry.
With serious or semi-serious EV offerings, you could compare the Ford and Volkswagen electric options to Tesla options, but that misses the point. The point is not for these EV models to compete with each other. Rather, we want to know how serious the offerings are, how much production capacity there is for them, and whether word of mouth will explode sales among the broader car-buying public? The goal — and expectation — is not for various EV models to compete over 2–3% of the market. The goal — and expectation — is that these competitive electric vehicles will build on each other and help “normal people” jump into electric transport, raising overall EV market share to 5%, 10%, 20%, 50%, and eventually 100% market share!
The Ford and Volkswagen EVs don’t look like they’d be put head to head in many people’s considerations. It looks more like Ford and Volkswagen locked arms and are plowing forward with EVs together in a complementary way. Unfortunately, two of their mass-market competitors — Toyota and Honda — are just dragging their feet and intent on being run over by a steam train going in the wrong direction. Whether Tesla is locking arms as well or running on ahead, two of the most refreshing news items of the year are about these large traditional automakers throwing their electrons behind true EV revolution. When will that wake up the likes of Honda and Toyota?
The opportunity seems blatantly obvious. Forget about Tesla — just sell highly competitive, compelling electric vehicles, grow the EV pie, don’t let these be compliance cars, and skip into the future as quickly as possible in order to capitalize on the tech transition rather than put your company at risk of total collapse/bankruptcy. Gobble up customers from Honda and Toyota who are ready to move on from conventional hybrids and efficiency solutions from two decades ago rather than today.
The world is ready for electric vehicles. Ford and Volkswagen are showing signs they are as well, which could make them strong Tesla allies, and serious threats to Honda, Toyota, and other conventional automakers that are far too slow to electrify.
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