Volkswagen eyeing global electric car market dominance by 2025

The German carmaker said reaching its target of one million electric vehicle deliveries this year could put it ahead of Tesla

Volkswagen is hoping to overtake Tesla next year and dominate the electric car market by 2025.

Volkswagen shares soared as much as 29% – the most in 12 years – after the German carmaker outlined aims to become the global electric vehicle leader by 2025 at the latest.

Volkswagen said reaching its target of one million electric vehicle deliveries this year could put it ahead of Tesla.

The German company announced plans to standardise key technologies across its sprawling industrial empire and generate scale effects that both Tesla and established carmakers are unlikely to match. 

On Monday, VW said it would build six battery factories in Europe alone.

“We will accelerate our transformation journey in 2021 and beyond,” Volkswagen chief executive Herbert Diess said. 

Mr Diess has been overhauling VW’s vast operations to free up funds for spending on the battery and software capabilities that made Tesla the world’s most valuable carmaker last year.

Operating profit at VW’s namesake passenger-car brand plummeted to €454m in 2020, from €3.8bn in 2019. 

Audi, which leads the group’s software expansion, saw operating profit decline to €2.7bn from €4.5bn.

VW intends to boost its software operation’s headcount to 10,000 as it develops automated-driving features and in-car operating systems. 

The hiring push would make VW one of Europe’s largest software firms.

Elsewhere, Foxconn will decide between Mexico and Wisconsin for the site of its first electric-car plant this year, making a big bet on the nascent business at a time technology giants including top customer Apple are looking to expand into vehicles.

The Taiwanese manufacturer already has operations in the Latin American country and the central US state, and could utilise its existing structures, chairman Young Liu said.

Availability and affordability of skilled labour and engineering talent will be among deciding factors, he said.

Foxconn, the world’s largest assembler of iPhones, is hoping to replicate its smartphone success by building clients’ electric vehicles from the chassis on up. 

Amid reports of Apple’s car project gaining momentum, Foxconn has bulked up its automotive capabilities, aiming to become a contender in the race to make vehicles for the US giant.

Meanwhile, Huawei Technologies has said it will begin charging mobile giants like Apple a “reasonable” fee for access to its trove of wireless 5G patents, potentially creating a lucrative revenue source by showcasing its global lead in next-generation networking.

• Bloomberg