Volkswagon Has A Clue

[wdn]

You did not even know of the existence of the mandate and now you are presenting yourself as some sort of expert on the mandate? Quite hilarious. I had to inform you of the mandate in the first place.

FCA is a defunct company. It no longer exists.

 

[Badgerstate]

Volkswagon sees the writing on the wall regarding the EV market. They want to have a truly competitive EV on the market by 2026.They realize that to be competitive with Tesla, they are going to have to spend billions to modernize their factories for EV production and that may even include demolishing some existing factories and starting over.

This is probably a sound plan. However, 2026 is a long way away. Tesla has proven to be able to go from groundbreaking for a new factory to having the first vehicles rolling off the assembly line in just one year. Will VW or any other automaker be able to do that ? By 2026 how many more factories will Tesla have operational around the world ? 3 or 4 I can imagine. And they will likely have several sub- $30k vehicles in their lineup.

Volkswagon is rightfully concerned about where the market will be in just a few years and is getting ready to make major commitments of resources to be a major player. I hope they succeed as competition is good for the consumer. Toyota may be in trouble, it doesn't look like their solid state batteries are going to be viable, at least not for many years and millions of dollars of development.

The big question is will the US automakers have the capitol to go whole hog like VW plans on doing ? Or by 2026 will they still be living in the 1980's and producing some mediocre EV's and hoping for brand loyalty and government (i.e taxpayer) bailouts to keep them in business ?

Amen. VW is doing some really great things right now. Ford too. IMO, in the not so distant future, all of those who are doubting how viable EVs are will be proven very wrong.

 

[JeffKeryk]

Funny how people equate VW and market share in the US. Maybe instead of market share people should look at profit margin?

Well? Spill! It seem as though GM% per car is pretty low... Under 5% ? Kinda hard to believe. I know they are working on improving margins, shooting for 5 to 7 percent.
VW Gross Margin Pct

Seems like VW is in the lower tier of per car margin. What numbers do you have?
I love business analytics!

 

[RooflessVW]

Well? Spill! It seem as though GM% per car is pretty low... Under 5% ? Kinda hard to believe.
VW Gross Margin Pct

Seems like VW is in the lower tier of per car margin. What numbers do you have?
I love business analytics!

I think the average Porsche brings in $20k of profit.

That's... Significant.

 

[wdn]

The average Porsche is well north of a hundred thousand dollars though isn’t it? A Carerra is over $150K. The figure Jeff just quoted says this about Volkswagen:

“margin of 3% to 4% for its main brand,” i.e the Volkswagen brand.

 

[wdn]

Amen. VW is doing some really great things right now. Ford too. IMO, in the not so distant future, all of those who are doubting how viable EVs are will be proven very wrong.

I am already doubting the viability of the power grid since California is having backouts akin to a third-world country. Gasoline in the UK costs four times what it does in the US and now they are having near riots and bringing in the army to deliver fuel. Despite that most cars there use gas. There is something a bit precious about claiming “history will show I was right” too. Jimmy Carter said the United States would be out of oil in the first decade of the 21st Century.

 

[JeffKeryk]

I think the average Porsche brings in $20k of profit.

That's... Significant.

Porsche's margins are the envy of the indistry, no doubt. $20K may be a little high for the cheaper cars, but still, a Camry makes under $3K profit per car in comparison.
The incredible 911 is one of the very few mass produced cars with a higher per car GM% than the Tesla Madel 3, which is now like 26%. Of course the Model 3 is the #1 selling luxury car in the world, so from a pure numbers game, it slaughters the 911 in profit contribution or any Porsche for that matter. Now if the 911 sold more cars and could take advantage of economies of scale, wow! Porsche's off-the-charts margins are due in part by their exclusivity; their built-in premium pricing.

VWs are in a much different class altogether. They make maybe $800 per car.
I love analytics. There is truth in numbers, but you gotta get past "the numbers" and understand what they mean. That's business analytics.

 

[JeffKeryk]

I am already doubting the viability of the power grid since California is having backouts akin to a third-world country. Gasoline in the UK costs four times what it does in the US and now they are having near riots and bringing in the army to deliver fuel. Despite that most cars there use gas. There is something a bit precious about claiming “history will show I was right” too. Jimmy Carter said the United States would be out of oil in the first decade of the 21st Century.

Gas in CA can exceed $5 per gallon. That's quite a catalyst for change.
We are the 5th largest economy in the world. The state's tax surplus is huge.
Are there serious energy challenges? Of course.
If we cannot solve the grid and energy challenges no one can. We will get there.

 

[wdn]

$5 gas is a catalyst for moving out of California since most of that is tax. I paid $2.85 a gallon here in New Hampshire today. It is not as bad as London that is £2.68 per liter.

 

[PimTac]

$5 gas is a catalyst for moving out of California since most of that is tax. I paid $2.85 a gallon here in New Hampshire today. It is not as bad as London that is £2.68 per liter.

It’s a definite drag on the economy. Higher fuel prices mean higher costs for products. Another reaction by the public is to drive less which also affects the economy. We are seeing the effects already and more is to come.

Until I see the major fuel station brands start to install chargers at their locations in a big way I don’t see how the EV market can expand. Then the question of the grid being able to supply this increased demand. Not yet ready for prime time.

 

[wdn]

I hear claims about California being 5th largest economy and take it with a pinch of salt. The GDP growth is negative. California cannot even supply its own water. It is also has state liabilities of $362.87 billion and net debt around $55 billion or almost $75,000 per taxpayer. Large companies are also moving their corporate headquarters to Texas a trend that seems to be accelerating. I wish you well, but don’t see a rosy picture for the power grid in particular what with the rolling blackouts, and that’s without electric cars.

 

[Vercingetorix]

Well? Spill! It seem as though GM% per car is pretty low... Under 5% ? Kinda hard to believe. I know they are working on improving margins, shooting for 5 to 7 percent.
VW Gross Margin Pct

Seems like VW is in the lower tier of per car margin. What numbers do you have?
I love business analytics!

Why don’t you try VW as a whole i.e. Porsche, Audi, Ducati, Traton, Bentley, Lamborghini et al ? You claim to like business analytics, but you seem to pick and choose what to love.

 

[JeffKeryk]

Why don’t you try VW as a whole i.e. Porsche, Audi, Ducati, Traton, Bentley, Lamborghini et al ? You claim to like business analytics, but you seem to pick and choose what to love.

Because this post is about VW not the VW Group.
Like most car companies, the VW Group had a horrible 2020, due in large part to the pandemic. GM% from automotive sales was 3.7% vs 6.5% in 2019. 2021 has bounced back and margins are forecasted to be between 6% and 7.5%.
The VW Group is a automotive powerhouse and I am sure they will continue to be.

 

[Vercingetorix]

Because this post is about VW not the VW Group.
Like most car companies, the VW Group had a horrible 2020, due in large part to the pandemic. GM% from automotive sales was 3.7% vs 6.5% in 2019. 2021 has bounced back and margins are forecasted to be between 6% and 7.5%.
The VW Group is a automotive powerhouse and I am sure they will continue to be.

Only if you like to think so. VW is all of its subsidiaries. You cannot separate them. Audi and VW use Porsche platforms, Porsche uses VW platforms. What gets billed to who for development is anybodies guess. The fact is you cannot separate one division from the rest.

 

[hacker_pschorr]

Look up a Polaris Slingshot, it weighs 1700 pounds, can carry 2 people and is road legal (so it passed the safety specs) with reports of 50+MPG (rated 45MPG). It doesn't have any "creature comforts" though, no A/C, no 11 inch infotainment system, no heated leather seats, no cooled seats etc.

Bad example since the Slingshot is sold as a motorcycle and doesn't have to comply with car regulations. The Mazda Miata or Subaru BRZ would be a better example.

Because this post is about VW not the VW Group.

Maybe it should be about VAG since Porsche is doing the same thing:
https://www.caranddriver.com/news/a37692178/2025-porsche-718-electric-future-details/

 

[JeffKeryk]

Only if you like to think so. VW is all of its subsidiaries. You cannot separate them. Audi and VW use Porsche platforms, Porsche uses VW platforms. What gets billed to who for development is anybodies guess. The fact is you cannot separate one division from the rest.

I gave you the VW Group numbers.

 

[Vercingetorix]

I gave you the VW Group numbers.

Business Insider reported on Tuesday that the Wolfsburg-based firm did not expect to be able to produce more than 800,000 vehicles this year due to semiconductor bottlenecks.


The spokesperson declined to confirm that figure and said it was not possible to reliably forecast the impact of the semiconductor shortage on production and deliveries by the end of the year.

This is from your article. Not confirming the 800,000 number tells you this is is made up statistic. VW group has already delivered 5,000,000 cars this year. At the low end of 6% profit that’s still a huge amount of money.

 

[DuckRyder]

The VW dealer is one of the few in town that actually has some cars. And it isn't because they aren't selling because they change and there are plenty of new ones about town...

 

[mightymousetech]

Volkswagen has a 2 percent market share in the United States. They can go knock themselves out, good luck to them. They are coping with EU mandates but the US has no such mandates.

Maybe it’s the US that is out of touch?

 

[4WD]

Maybe it’s the US that is out of touch?

What does that mean ?