Breaking News
Close
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Volkswagen powers up the grid to take on Tesla

Stock MarketsNov 17, 2021 07:25
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
5/5 © Reuters. FILE PHOTO: View of the depot tower of German carmaker Volkswagen's electric ID.3 car in Dresden, Germany, June 8, 2021. Picture taken with a fish eye lens. REUTERS/Matthias Rietschel/File Photo 2/5

By Vera Eckert, Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) - Volkswagen (DE:VOWG_p) plans to double staff numbers at its charging and energy division, roll out new payment technology next year and strike more alliances to take on Tesla (NASDAQ:TSLA) in a key electric vehicle (EV) battleground: power infrastructure.

By ensuring there are enough fast-charging plugs - and enough power - for the EVs it wants to sell, Europe's biggest carmaker hopes to convince drivers worried about battery ranges that they can ditch their fossil fuel cars for good.

Underlining its electric ambition, Volkswagen has drafted in power industry veteran Elke Temme, who spent nearly two decades at German energy companies RWE and Innogy, to help the carmaker get in better shape to take on Tesla.

In the job since January, Temme, 53, has been tasked with bundling the carmaker's various power activities such as procuring energy, enabling customers to charge their cars at home, and on the road, and selling the electricity required.

Getting this done will require a bigger workforce and Temme plans to double the staff at Volkswagen's European charging and energy division, known as Elli, to about 300 in 2022, having already tripled it this year, she told Reuters in an interview.

"We're investing in huge growth areas that don't always have to be profitable right away. We always see these investments in the overall context of our group strategy," she said. "That's why building up a comprehensive infrastructure is key."

Temme declined to specify the budget she has been given but said Volkswagen, led by Tesla admirer Herbert Diess, has approved the investment requests for the division, which also sells home battery storage systems similar to Tesla's Powerwall.

Volkswagen leads the pack worldwide by far with its investment plans for EVs and batteries through 2030, according to a Reuters analysis https://reut.rs/3wQop01, and it is planning to spend 35 billion euros on battery EVs by 2025. Global automaker EV & battery investments, https://graphics.reuters.com/CLIMATE-UN/AUTOS-EV/jnvwexwgqvw/chart.png

PLAYING CATCH UP

But when it comes to the networks of fast-chargers that many analysts believe are crucial for bringing EVs into the mainstream, VW has some catching up to do.

Tesla has been rolling out high-performance Superchargers for years and has a global network of about 30,000 fast-chargers that it says can give a 200 km (125 mile) boost in 15 minutes.

The company said in October that its own network has doubled in the past 18 months - and will triple over the next two years.

Volkswagen, meanwhile expects its network of fast-chargers to nearly quadruple to about 45,000 by 2025 - when it aims to overhaul Tesla as the global EV market leader - with 18,000 EV pumps in Europe, 17,000 in China and 10,000 in North America.

Volkswagen in March said it plans to spend 400 million euros on expanding its fast-charging network on the continent by then.

But that's a drop in the ocean compared with the 5 billion euros the European Union reckons is needed every year until 2040 to expand charging infrastructure on the continent, and it is raising the pressure on utilities and governments to step up.

In Europe, the Volkswagen group is a shareholder in the EU's fast-charging venture Ionity, along with rival carmakers BMW, Daimler's Mercedes-Benz, Ford and Hyundai.

It has also teamed up with energy firms such as Italy's Enel (MI:ENEI), Britain's BP (LON:BP) and Spain's Iberdrola (MC:IBE) to plug geographical gaps and form the blueprint for how funding for EV infrastructure can be split across industries.

"Various models are conceivable, from product partnerships and joint ventures to M&A," said Temme. Global automaker EV & battery investments, https://graphics.reuters.com/CLIMATE-UN/AUTOS-EV/myvmnkgmypr/chart.png

CARS AND POWER

Tesla has already shown that when it comes to EVs, just selling cars no longer cuts it. It has adopted a model that offers customers everything from cars to battery storage to solar panels as well as electricity https://reut.rs/3FjTlc2 in some U.S. states.

Volkswagen is now selling power to retail clients that drive an EV or plug-in hybrids. One of its tariffs - which is available to customers who don't own a VW - has attracted more than 10,000 clients since its launch in July, Temme said.

She said VW was planning to make its fast-chargers available for all EV drivers, unlike Tesla which has so far kept its supercharging network just for Tesla drivers - with the exception of a pilot programme in the Netherlands.

"We are pursuing a different approach than Tesla when it comes to charging infrastructure roll-out," said Temme.

"We want an open, non-discriminatory charging network and will develop our services to make our offer more comfortable, simpler, more attractive."

Volkswagen says its open-for-all approach means buyers of its EVs can charge at more than 250,000 existing public charging points across Europe - from various providers with various charging speeds.

The problem is that charging protocols and payment methods can vary across vendors, potentially turning the act of refueling an EV into a time-consuming and messy undertaking.

From the first quarter of 2022, Volkswagen plans to offer "Plug & Charge" technology in Europe to make the process smoother.

The car will store the owner's payment details and make a contactless payment when the charging plug is attached to the EV at refuelling stations set up for the service.

While these are new challenges for established carmakers, Temme, who witnessed first-hand the abrupt shift of Germany's utilities away from nuclear power in the wake of the Fukushima disaster, believes they can be mastered.

"Utilities must reinvent themselves and transition from nuclear and coal to renewables. In the automotive industry, including at Volkswagen, the question is currently how to consistently shift the focus from conventional vehicles to sustainable mobility," she said.

"These challenges are of similar magnitude."

($1 = 0.8738 euros)

Volkswagen powers up the grid to take on Tesla
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
DOWNLOAD APPApp store
Investing.com
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
or
Sign up with Email