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Competition from new entrants into Germany’s car sector, such as Tesla (NASDAQ: TSLA), has prompted Volkswagen (DE: VOWG p) to expedite plans to convert its main factory to produce electric vehicles, the firm announced on Wednesday.
“There is no question that we have to address the competitiveness of our plant in Wolfsburg in view of new market entrants,” Volkswagen spokesperson Michael Manske said, pointing to Tesla and new Chinese automakers making inroads into Europe.
“Tesla is setting new standards for productivity and scale in Grunheide,” he said, referring to a Tesla factory under construction near Berlin which at peak capacity will produce 5,000 to 10,000 cars a week – over double the entirety of German battery-electric vehicle (EV) production in 2020.
However, the spokeswoman rejected a claim published on Wednesday in the German newspaper Handelsblatt that said Volkswagen CEO Herbert Diess told a supervisory board meeting in September that the transition to EVs may cost the business up to 30,000 jobs. “A debate is now underway and there are already many good ideas.
There are no concrete scenarios,” Manske said of the report. According to a spokeswoman for Volkswagen’s employees’ council, while they would not comment on whether Diess made the comments, “a cut of 30,000 jobs is ludicrous and false.” EVs have much fewer parts than internal combustion engine vehicles and so require far fewer workers to manufacture.
According to one estimate, electrification might cost the car sector 100,000 jobs by 2025.German automakers are trying to keep up with the more efficient production platforms of pure-play EV manufacturers. While Volkswagen presently needs roughly 30 hours to build its electric ID.3, Tesla only needs 10 to produce a Model 3. Diess earlier stated that Tesla will increase competitiveness in Germany.
Volkswagen’s Wolfsburg plant, the world’s largest with over 50,000 employees, does not currently build EVs, but the company expects to start producing an electric vehicle there in 2026 as part of a project called “Project Trinity.” In addition to its existing IPO ambitions for its battery division, the German automaker is considering offering its car charging and energy businesses, Chief Technology Officer Thomas Schmall told Manager Magazin in an interview published on Wednesday.
Schmall stated that nothing had been decided and that it could take up to two years for the new company to be founded and ready for the stock market.
Story by : Norvisi Mawunyegah