May 26, 2022: Volkswagen’s chief executive, considered Europe’s biggest carmaker, can overtake Tesla to become the world’s biggest seller of electric vehicles by 2025.
Speaking to CNBC at the World Economic Forum in Davos, Switzerland, Herbert Diess said alleviating supply chain issues would help create momentum for the German auto giant in the upcoming months.
“Markets are always about the future,” Diess said when asked the way investors valued Tesla at a premium to different traditional carmakers, such as Volkswagen.
“Tesla currently is in the lead when it comes to EVs, probably it is the most digital car company, and they have a few advantages,” he continued. “We are still aimed at keeping up and probably overtaking by 2025 when it comes to sales.”
Diess said Tesla had demonstrated promising results and high returns with a credible business model. Although, he reaffirmed his belief that Volkswagen could soon close the gap in EV sales.
“I think for Tesla, which is ramping up, will probably be a bit more challenging. They are opening up fresh plants, and we are trying to keep up with speed. In the second half of the year, we are going to create some momentum,” Diess said.
Volkswagen’s Frankfurt-listed shares traded about 0.9% lower on Tuesday morning, roughly in line with losses in the autos sector on the pan-European Stoxx 600.
Over two years into the coronavirus pandemic, the auto industry continues to grapple with the challenge of obtaining crucial parts and building enough vehicles to meet demand.
Shortages of critical supplies, particularly when it comes to battery production, are expected to be an ongoing constraint for the growth of electric vehicle sales in the years ahead.
Nonetheless, Diess said there are some positive signs on the horizon. He expects to see relief from the semiconductor supply market from the middle of the year.
“I would say that we would see an alleviation of this situation towards mid-year and second half. We should be in better shape if the situation is not getting any worse, which I don’t think so,” Diess said.
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