A VW executive said that electric cars are ‘near’ price parity with gasoline vehicles and when that happens it will be the “tipping point” for EV adoption.
Reinhard Fischer, senior vice president for Volkswagen Group and the head of strategy for the VW brand in North America, made the comment to Automotive News at the 2019 CAR Management Briefing Seminars in Michigan:
“We strongly believe that the tipping point is near, and that tipping point will be price equity”
The executive believes that Volkswagen’s massive electric car push will bring new economies of scale to electric car production and achieve price parity.
VW is currently investing billions in order to change its all-electric car production capacity from a few thousand units per year to 2 to 3 million all-electric cars a year by 2025.
“Once you overcome the fear of something new, the EV is the better choice for you. I don’t think it’s going to take a lot of convincing. There is a fundamental curiosity. Everybody sees the end state. When you put pencil to paper, owning a full-electric vehicle costs about half of what a gas car costs me to operate.”
However, there are going to be a few hurdles, but it’s nothing too difficult to overcome.
The executive said that VW held a few focus groups about EVs in order to learn what is holding back people from going electric and they didn’t find any unsolvable problems.
“There is still a fear about driving electric cars through water. For 50 years, we’ve educated people that electricity and water don’t mix.”
Fischer also mentioned the charging infrastructure:
“Range anxiety has now been replaced by charging anxiety,” “A hundred years ago, gasoline was sold at pharmacies. Today, we have 122,000 gas stations in the United States. It’s transformed from a bottleneck to a commodity. Electric charging is going to be exactly the same.”
In North America, VW is deploying charging stations through Electrify America and in Europe, the company is participating in the Ionity charging network.
This is exactly what I’ve been saying for a while now. It’s nice to hear it from a major automaker, but the problem is that this major automaker is still guiding the majority of its sales to be internal combustion engines a decade from now.
If we achieve price parity and there’s a tipping point in electric vehicle adoption, there will be a snowball effect and people will quickly see EVs as the only viable option.
It will cripple the long term value retention of gasoline-powered cars and make buying such a car a very bad financial decision on many levels.
Automakers need to prepare themselves to quickly shift their production capacity to electric cars in order to respond to that tipping point.
It’s going to happen a lot faster than many people think.
That’s the premise of Zalkon. It’s going to happen at some point before 2025 and many companies will not be ready for it while others will take advantage. It creates many investment opportunities in the sector.
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