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In a recent report, UBS said the 2025 CO2 targets for Volkswagen is challenging since it has to double its EU EV share to 25% in 2025 from 13% in 2023 to reach CO2 compliance.
“It is unrealistic that VW will achieve its CO2 targets on its own. The jump is far too big for that,” said Patrick Hummel, Head of European Autos Research at UBS.
“VW urgently needs pooling partners. And even then it will be tight,” predicts Hummel. Tesla, Volvo, Toyota, SAIC and BYD are possible candidates. But only Tesla is in a position to bridge the gap at VW as the sole partner. Mercedes and Stellantis have already formed pools with Smart and Leapmotor."
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As a result, it expects aggressive pricing discounts for EVs from Volkswagen and other European automakers that lacks behind the targets.
“We expect an EV price war evolving in the course of next year as (manufacturers) VW above all, will have to aggressively push their EVs,” he said.
“According to our calculations, VW will lose around ten percent of its operating profit in 2025 due to the adjustment to the new CO2 targets. That corresponds to around two billion euros before taxes,” explained Hummel.
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He doesn’t see signs that the EU will push back on the 2025 targets unless the price discounts doesn’t revive the demand for EVs.
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