Over the weekend, the
CEO of the
Volkswagen Group mentioned to
a German newspaper their intention to maintain a cautious approach towards any potential
electric vehicle pricing competition recently initiated by
Tesla and now by
Ford.
Oliver Blume, the
VW Group CEO, stated to the
Frankfurter Allgemeine Zeitung, “We have a well-defined pricing
strategy and prioritize dependability. We have confidence in the quality of our products and brands.” Moreover, as per
Automotive News,
Porsche, part of VW Group, is contemplating a potential 6% increase in the prices of their vehicles, as per undisclosed dealer sources, possibly beginning in March.
Blume mentioned to the newspaper that VW won’t sacrifice profitability for sales volume, a strategy followed by many automakers and startups but not universal in the industry. Some electric vehicle manufacturers operate on the premise of selling at a loss initially to gain market share and later raise prices as material costs decrease and operational efficiencies improve—a tactic that seems prevalent in the EV sector.
VW Group appears to be opting for a divergent approach, which poses risks for one of the world’s leading automakers. The Chief Financial Officer, Arno Antitz, also mentioned in the Frankfurt newspaper the minimal investments planned for internal combustion technology and the belief that the most costly stages of EV development will likely conclude within 2-3 years.
“The dual financial burden will diminish, and at that point, we aim to realize substantial gains from the electric mobility sector,” he added.
This sentiment is echoed across Europe, with the boss of the Renault brand stating that they have no intentions of reducing prices due to the adverse effects on residual values and existing customer base. This is a lesson Tesla is learning post its significant price reduction, one that others might also grasp if they decide to follow suit.
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