Volkswagen CEO: “NIO and Xpeng are very serious competitors in the future”

Written by Cláudio Afonso | info@claudio-afonso.com

During Volkswagen’s Q4 2021 Results Conference Call on Tuesday evening, CEO Diess was questioned about the Chinese EV makers as a competition. Herbert Diess named NIO and Xpeng as the main competitors due to its “technology-oriented” spirit. Check the transcript below:

Gabriel Adler, Citi Analyst

Gabriel Adler from Citi. My question is on EV competition in Europe. We’re beginning to see very early signs of success for new Chinese EV brands in Europe and more specifically in the Norwegian market where the share of Chinese Buzz is growing very significantly. There’s often a little focus on the challenge posed by Tesla to VW ramping up in Europe. I’d be really interested in hearing your thoughts on whether you can view the new Chinese EV start-ups that are beginning to export to Europe has credible competitors? And if so, how you plan to manage this increased competition?

Herbert Diess, Volkswagen CEO

“Yes, for sure, we see the Chinese competitors, mostly the technology-oriented like NIO or Xpeng, we see as very serious competitors in the future. And yes, we watch out for their primary activity. We always knew that this game of EVs would be a new game where you start with a sheet of paper. Still, I think that we are able to compete with our worldwide volume basis, with our technology, with the quality of product with our brands. And I would say our success in this first round of EV competition is quite — make us quite confident.

Advertisements

Now, it was — in the beginning, it was quite unclear that EVs would basically work in all segments. Now EVs are working at Porsche where we have the Taycan already outselling the 911, EVs are working with Audi e-tron, [coupe] e-tron on the market, e-tron GT, one of the most iconic products already for Audi. They’re working in volume for us with the platform Volkswagen, ŠKODA, and this means that we think we can be as fast as the new entries.

And you have — you should keep in mind that it takes a lot of effort to become relevant in this automotive industry. This will be still a game about scale. You need 2%, 3%, 4% world market share to be really relevant and competitive, at least even if you are only premium. And if you look back in the success of Tesla, this is a success after probably 15 years and spending some 20 billion. So don’t compare any other start-up to Tesla. They are just much more advanced. And many of the start-ups we see in the market, some will probably succeed, but they need a lot of energy and capital for succeeding in this industry.”