Volkswagen must change its approach to how it sells electric vehicles (EV) in China, the world's largest car market, Chief Executive Herbert Diess said, in a response to poor EV sales there.

"Sales are picking up but it requires focus and different approaches as the customers for the EVs are much younger and different to our customer base we are having with the more traditional brands like Volkswagen in China," Diess told journalists after first-half results release.

By the end of the year, Volkswagen wants to sell between 80,000 and 100,000 of its all-electric ID series in China. In the first half, deliveries of battery electric vehicles (BEV) in China stood at 18,285.

"We are noticing that we have to change our approach," Diess said.

"We have the financial power, we have the sales network, we are coming forward with new formats in the shopping malls, we are becoming much more digital and it's going fast because we are much faster in China than we are in the rest of the world."

Volkswagen must change its approach to how it sells electric vehicles (EV) in China, the world's largest car market, Chief Executive Herbert Diess said, in a response to poor EV sales there.

Volkswagen must change its approach to how it sells electric vehicles (EV) in China, the world's largest car market, Chief Executive Herbert Diess said, in a response to poor EV sales there. "Sales are picking up but it requires focus and different approaches as the customers for the EVs are much younger and different to our customer base we are having with the more traditional brands like Volkswagen in China," Diess told journalists after first-half results release. By the end of the year, Volkswagen wants to sell between 80,000 and 100,000 of its all-electric ID series in China. In the first half, deliveries of battery electric vehicles (BEV) in China stood at 18,285. "We are noticing that we have to change our approach," Diess said. "We have the financial power, we have the sales network, we are coming forward with new formats in the shopping malls, we are becoming much more digital and it's going fast because we are much faster in China than we are in the rest of the world."

We need to change e-car approach in China: Volkswagen CEO

Tesla Inc showed signs of divergent strategies in the world’s two biggest automotive markets, raising prices to boost profit margins in the United States while keeping prices steady in China and hoping to grow sales there.

Tesla raised prices for the most affordable versions of Model 3 and Model Y about a dozen times this year in the United States, according to data tracked by Reuters. At the same time, Tesla recently introduced an affordable Model Y version in China, where it refrained from price hikes.

Tesla posted record vehicle deliveries in the second quarter, and the price increases in North America boosted quarterly profits to a record.

But in China, the world’s biggest electric vehicle (EV) market, Tesla faces competition from local rivals and problems that include product recalls, high-profile protests by consumers and pressure from regulators.

Bernstein analyst Toni Sacconaghi said the introduction of the lower-priced Model Y in China ”may make sustained margin improvement difficult” for Tesla and raises questions about ”the health of Chinese demand.”

A study by Bernstein analysts found Tesla owners in China were less enthusiastic and had lower repurchase intentions than owners in the United States and Europe.

Tesla raised prices for Model Y Long Range at least six times in the United States this year, bumping by $5,500 to $53,990. In China, the world’s most valuable carmaker raised prices of the Model Y SUV and Model 3 sedan only once this year.

The Model Y version has a price tag of 276,000 yuan ($42,394). The company also has launched promotional campaigns in China such as loan offers.

”I think Tesla is looking to be as competitive as it can be in China. Lower prices will be a part of that aggressive market positioning,” Roth Capital Partners analyst Craig Irwin said. ”There is a very large difference in battery prices in the U.S. and China, as well as local vehicle manufacturing costs.”

Tesla started production at its Shanghai factory in late 2019. It has boosted the sourcing of cheaper local components, including batteries from China’s CATL and LG’s Chinese factory.

”It wasn’t so long ago that the group was trimming prices in the U.S. to gain scale and maximize profitability, and it feels like we’re now seeing that in China too,” Hargreaves Lansdown analyst Nicholas Hyett said.

The low cost of producing local EVs in China would have a lasting effect on Tesla, said Gene Munster at Loup Ventures.

”Teslas are on average 3x the cost of a typical EV made in China so they have to be priced less than the U.S. to compete,” Munster said. ”Prices of Teslas in China will be below (the) rest of the world for the next decade.”

Tesla also cut costs and boosted margins in the U.S. market by getting rid of some parts like a radar sensor and lumbar support.

Tesla shares rebounded 0.5% in morning trade on Wednesday after falling the previous session.

CHINA MARKET SHARE SLIPS

In China, Tesla’s share slipped to 11% in the battery electric vehicle market, which excludes plug-in hybrid cars, in the second quarter from 18% a year earlier, according to GLJ research. But data from Morgan Stanley showed Tesla still held a U.S. battery-electric market share of nearly 70% as of February, although that was down from 81% a year earlier.

China accounts for 44% of the global EV market, a much bigger share than the 17% held by the United States.

In China, Tesla faces competition from electric vehicle makers like Nio Inc and Xpeng Inc. In the United States, Tesla’s brand is stronger and its main rivals are legacy automakers like Ford and General Motors, which generate only a fraction of their sales from EVs.

GLOBAL CHIP SHORTAGE

Tesla CEO Elon Musk has reiterated that the company’s mission is to make electric cars affordable and has blamed vehicle price increases on a shortage of chips and raw materials.

Tesla is coping with the chip shortage by using alternative chips and rewriting software, Musk said.

He provided a cautious outlook for chip shortage. ”It does seem like it’s getting better,” he said on the second-quarter earnings call, but added: ”it’s hard to predict.”

Tesla Inc showed signs of divergent strategies in the world’s two biggest automotive markets, raising prices to boost profit margins in the United States while keeping prices steady in China and hoping to grow sales there.

Tesla Inc showed signs of divergent strategies in the world’s two biggest automotive markets, raising prices to boost profit margins in the United States while keeping prices steady in China and hoping to grow sales there. Tesla raised prices for the most affordable versions of Model 3 and Model Y about a dozen times this year in the United States, according to data tracked by Reuters. At the same time, Tesla recently introduced an affordable Model Y version in China, where it refrained from price hikes. Tesla posted record vehicle deliveries in the second quarter, and the price increases in North America boosted quarterly profits to a record. But in China, the world’s biggest electric vehicle (EV) market, Tesla faces competition from local rivals and problems that include product recalls, high-profile protests by consumers and pressure from regulators. Bernstein analyst Toni Sacconaghi said the introduction of the lower-priced Model Y in China ”may make sustained margin improvement difficult” for Tesla and raises questions about ”the health of Chinese demand.” A study by Bernstein analysts found Tesla owners in China were less enthusiastic and had lower repurchase intentions than owners in the United States and Europe. Tesla raised prices for Model Y Long Range at least six times in the United States this year, bumping by $5,500 to $53,990. In China, the world’s most valuable carmaker raised prices of the Model Y SUV and Model 3 sedan only once this year. The Model Y version has a price tag of 276,000 yuan ($42,394). The company also has launched promotional campaigns in China such as loan offers. ”I think Tesla is looking to be as competitive as it can be in China. Lower prices will be a part of that aggressive market positioning,” Roth Capital Partners analyst Craig Irwin said. ”There is a very large difference in battery prices in the U.S. and China, as well as local vehicle manufacturing costs.” Tesla started production at its Shanghai factory in late 2019. It has boosted the sourcing of cheaper local components, including batteries from China’s CATL and LG’s Chinese factory. ”It wasn’t so long ago that the group was trimming prices in the U.S. to gain scale and maximize profitability, and it feels like we’re now seeing that in China too,” Hargreaves Lansdown analyst Nicholas Hyett said. The low cost of producing local EVs in China would have a lasting effect on Tesla, said Gene Munster at Loup Ventures. ”Teslas are on average 3x the cost of a typical EV made in China so they have to be priced less than the U.S. to compete,” Munster said. ”Prices of Teslas in China will be below (the) rest of the world for the next decade.” Tesla also cut costs and boosted margins in the U.S. market by getting rid of some parts like a radar sensor and lumbar support. Tesla shares rebounded 0.5% in morning trade on Wednesday after falling the previous session. CHINA MARKET SHARE SLIPS In China, Tesla’s share slipped to 11% in the battery electric vehicle market, which excludes plug-in hybrid cars, in the second quarter from 18% a year earlier, according to GLJ research. But data from Morgan Stanley showed Tesla still held a U.S. battery-electric market share of nearly 70% as of February, although that was down from 81% a year earlier. China accounts for 44% of the global EV market, a much bigger share than the 17% held by the United States. In China, Tesla faces competition from electric vehicle makers like Nio Inc and Xpeng Inc. In the United States, Tesla’s brand is stronger and its main rivals are legacy automakers like Ford and General Motors, which generate only a fraction of their sales from EVs. GLOBAL CHIP SHORTAGE Tesla CEO Elon Musk has reiterated that the company’s mission is to make electric cars affordable and has blamed vehicle price increases on a shortage of chips and raw materials. Tesla is coping with the chip shortage by using alternative chips and rewriting software, Musk said. He provided a cautious outlook for chip shortage. ”It does seem like it’s getting better,” he said on the second-quarter earnings call, but added: ”it’s hard to predict.”

Tesla hikes electric car prices in the US; holds a line in China

Even before making its India entry, Tesla is making noises to attract attention, a trait Tesla’s boss Elon Musk is known for.&nbsp;

Seeking a cut in import duty on its highly expensive electric cars, Tesla has once again ignited a debate on the import duty on cars.&nbsp;

However, this time the debate is limited to electric cars and the auto industry in India is divided over Tesla's demand.&nbsp;

In response to an Indian's request to launch electric cars, Tesla's high profile boss Elon Musk tweeted "We want to do so, but import duties are highest in the world by far of any large country! Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India".&nbsp;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet">
We want to do so, but import duties are the highest in the world by far of any large country! 
 
Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India.
— Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1418641920595791872?ref_src=twsrc%5Etfw">July 23, 2021</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

By doing so Musk is lobbying hard for low duty on the import of electric cars. Hyundai India boss MD S S Kim has also backed Elon Musk’s call to lower the duties as it will help grow the EV market.&nbsp;

However, the founder of India's Ola, Bhavish Aggarwal was quick to dismiss these demands. Expressing his views, Bhavish tweeted “Strongly disagree with both. Let’s have confidence in our ability to build indigenously and attract global OEMs to build in India, not just import. We won’t be the first country to do so!"&nbsp;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet">
Strongly disagree with both. Let’s have confidence in our ability to build indigenously and also attract global OEMs to build in India, not just import. We won’t be the first country to do so! <a href="https://t.co/n6k7ShYeJX">https://t.co/n6k7ShYeJX</a>
— Bhavish Aggarwal (@bhash) <a href="https://twitter.com/bhash/status/1419945635130736644?ref_src=twsrc%5Etfw">July 27, 2021</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

By opposing Tesla and Hyundai's demands on cutting down on import duties, Ola is championing the cause of India's 'Make in India' scheme.&nbsp;

Ola has recently ventured into the electric mobility space. It is setting up India's largest electric vehicle facility spread over 500-acre in Tamil Nadu's Krishnagiri. Here it is planning to make 10 million vehicles annually something which is music to the ears of the present government.&nbsp;

Ola also recently opened bookings of its e-scooter at Rs 499, garnering over 1 lakh bookings in advance.

Tesla, on the other side, has been talking about its intention to Indian market for years but it is only in the recent past some serious activity on its entry is visible as the U.S based EV maker has registered its offices, hired few top employees and even vehicles have been imported for homologation.&nbsp;

Still, sometimes it feels like Tesla is looking for something more as even the high-end luxury car market is still very small in India. It is in this market and to the prospective owners of Mercs, BMWs and Audis, Tesla would like to sell its ultra-expensive cars.&nbsp;

But other luxury car players are also not sitting silent. India has recently seen a flurry of launches in electric vehicle space, for those who can afford these electric luxury SUVs costing upwards of Rs 10 mn or $134,000. Last week Audi launched the e-tron in India at a starting price of Rs 99.99 lakh (ex-showroom) along with its entire SUV range including the e-Tron 50, the e-tron 55 and the e-tron Sportback 55. Much before that Mercedes-Benz launched its luxury electric SUV EQC and Jaguar launched its i-Pace in the same price bracket.&nbsp;

Government as expected is also not in a mood to give sops to import of hi-end electric cars, they don't get anything from it. The Indian government has indicated it is interested in giving concessions only if Tesla starts manufacturing cars.&nbsp;

Also, for an electric car market contributing to just around 5,000 units including affordable e-hatchbacks out of around 3 million cars sold annually in India, the sops don't make sense at all.&nbsp;

Sops or concessions if any should be given to e-scooters or those at the bottom of this e-pyramid and not those at the highest level of the vehicle market unless they are ready to invest first to create jobs and facilities. 
 
(Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.)

Even before making its India entry, Tesla is making noises to attract attention, a trait Tesla’s boss Elon Musk is known for. Seeking a cut in import duty on its highly expensive electric cars, Tesla has once again ignited a debate on the import duty on cars.

Even before making its India entry, Tesla is making noises to attract attention, a trait Tesla’s boss Elon Musk is known for. Seeking a cut in import duty on its highly expensive electric cars, Tesla has once again ignited a debate on the import duty on cars. However, this time the debate is limited to electric cars and the auto industry in India is divided over Tesla's demand. In response to an Indian's request to launch electric cars, Tesla's high profile boss Elon Musk tweeted "We want to do so, but import duties are highest in the world by far of any large country! Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India". We want to do so, but import duties are the highest in the world by far of any large country! Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India. — Elon Musk (@elonmusk) July 23, 2021 × By doing so Musk is lobbying hard for low duty on the import of electric cars. Hyundai India boss MD S S Kim has also backed Elon Musk’s call to lower the duties as it will help grow the EV market. However, the founder of India's Ola, Bhavish Aggarwal was quick to dismiss these demands. Expressing his views, Bhavish tweeted “Strongly disagree with both. Let’s have confidence in our ability to build indigenously and attract global OEMs to build in India, not just import. We won’t be the first country to do so!" Strongly disagree with both. Let’s have confidence in our ability to build indigenously and also attract global OEMs to build in India, not just import. We won’t be the first country to do so! https://t.co/n6k7ShYeJX — Bhavish Aggarwal (@bhash) July 27, 2021 × By opposing Tesla and Hyundai's demands on cutting down on import duties, Ola is championing the cause of India's 'Make in India' scheme. Ola has recently ventured into the electric mobility space. It is setting up India's largest electric vehicle facility spread over 500-acre in Tamil Nadu's Krishnagiri. Here it is planning to make 10 million vehicles annually something which is music to the ears of the present government. Ola also recently opened bookings of its e-scooter at Rs 499, garnering over 1 lakh bookings in advance. Tesla, on the other side, has been talking about its intention to Indian market for years but it is only in the recent past some serious activity on its entry is visible as the U.S based EV maker has registered its offices, hired few top employees and even vehicles have been imported for homologation. Still, sometimes it feels like Tesla is looking for something more as even the high-end luxury car market is still very small in India. It is in this market and to the prospective owners of Mercs, BMWs and Audis, Tesla would like to sell its ultra-expensive cars. But other luxury car players are also not sitting silent. India has recently seen a flurry of launches in electric vehicle space, for those who can afford these electric luxury SUVs costing upwards of Rs 10 mn or $134,000. Last week Audi launched the e-tron in India at a starting price of Rs 99.99 lakh (ex-showroom) along with its entire SUV range including the e-Tron 50, the e-tron 55 and the e-tron Sportback 55. Much before that Mercedes-Benz launched its luxury electric SUV EQC and Jaguar launched its i-Pace in the same price bracket. Government as expected is also not in a mood to give sops to import of hi-end electric cars, they don't get anything from it. The Indian government has indicated it is interested in giving concessions only if Tesla starts manufacturing cars. Also, for an electric car market contributing to just around 5,000 units including affordable e-hatchbacks out of around 3 million cars sold annually in India, the sops don't make sense at all. Sops or concessions if any should be given to e-scooters or those at the bottom of this e-pyramid and not those at the highest level of the vehicle market unless they are ready to invest first to create jobs and facilities. (Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.)

WINGS & WHEELS | A divided house over Tesla's clarion call on import duties

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We need to change e-car approach in China: Volkswagen CEO

Tesla hikes electric car prices in the US; holds a line in China

WINGS & WHEELS | A divided house over Tesla's clarion call on import duties