While many manufacturers have decided to join Tesla’s game by lowering the price of their electric cars, this is not at all the case with Volkswagen. The German firm is not the only one.
Price parity between thermal and electric cars is still far from being achieved, in particular because of the cost of the raw materials needed for the batteries. And while the price of lithium is rising, the trend would therefore be rather upward, especially as demand is increasingly strong. In France alone, sales of electric vehicles indeed exceeded those of diesel in December.
A sudden fall
Pending the rise of solid-state batteries, which could bring prices down, electric cars are therefore quite expensive. Nevertheless, it would seem that there is room for manoeuvre, as Tesla has proven. The American firm has indeed created a veritable tsunami by sharply dropping the prices of its Model 3 and Model Y, up to 13,000 dollars overnight. A drop which follows the worrying situation in China as well as in the United States.
And this had the effect of a bomb, causing several manufacturers to review their strategy. We think in particular of Xpeng, which has tumbled the prices of its P5, P7 and G3. A few days later, it was the turn of the Vietnamese brand VinFast to announce the implementation of promotional operations, without giving further details.
Finally, more recently, the American company Lucid lowered the price of its Air sedan, only for customers of its rental offer. Enough to hope to stay in the race against Tesla, which broke its sales record in 2022 with more than a million cars delivered. Finally, yesterday, Ford announced that it was lowering the prices of its Mustang Mach-E in the United States. A surprising decision, when the brand did not plan to reduce its prices at all, but rather to increase its profits.
But not all manufacturers are yet ready to engage in this sudden price war. And especially not Volkswagen. In an interview with the German newspaper Frankfurter Allgemeine Sonntagszeitungthe CEO of the brand, Olivier Blume affirmed thatno reduction was on the agenda at the moment.
Not all concerned
The leader asserts “have a clear pricing strategy and focus on reliability. We are confident in the strength of our products and our brands“. A subtle pike sent to the brand of Elon Musk? Anyway, no model from Volkswagen, whose electric range is currently made up of the ID.3, ID.4, ID.5 and ID. Buzz will not benefit from any price drop.
But the Wolfsburg firm is not the only one to refuse to engage in this field. As explained Automotive Newsthis is also the case for Porsche, which even plans toraise prices by 6% according to a spokesperson. The automaker also plans to launch a premium electric SUV, sitting above the Cayenne in terms of pricing. Already last July, the brand claimed that it would be easier to increase its profitability thanks to electric cars.
Renault also opposes this strategy of reducing prices, although its CEO, Luca de Meo, however, advocates reducing the size of batteries to offer cheaper cars in the future. But for now, there is no reason to drop the amount of cars already marketed. The new general manager of the diamond brand, Fabrice Cambolive, says that “if you reduce selling prices by 10% or more in a week, it hurts residual values and hurts existing customers“.
A phenomenon that precisely affects Tesla owners, while the price of used models has fallen sharply in recent times. However, Renault is not closed to a revaluation of prices, while its leader affirms that “it is foreseeable that the prices of electric vehicles will come under intense scrutiny“.
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