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Tesla vs. VW Group EV Sales in U.S. and EU Show Massive Market Divide

Tesla and Volkswagen have very different reasons to push for electrification. The former has made it its mission to accelerate the switch to electric propulsion while the latter uses it to wash away its sins that were uncovered back in 2015.
VW ID.4 1 photo
Photo: Volkswagen
Regardless of the driving force, both have a similar aim: to sell as many cars as possible. Volkswagen didn't use to have any incentive to sell EVs—there wasn't a demand, and the company had no reason to create one since its diesel- and gasoline-powered cars were finding new owners effortlessly—but then Tesla came along and made battery-powered cars cool.

Now, the two are locked in some distant race of sorts, though it's hardly a fair one: one has a lot of experience making EVs and the flexibility that comes with being a modern company, while the other has tons more experience of making vehicles in general, a few world-renowned brands under its belt (if we're referring to the VW Group, not just the actual brand), as well as the logistic and material resources amassed after decades of intense activity.

All things considered, Tesla should be nothing more than an ant on Volkswagen's boot. However, the fact it's much more than that only goes to show how important its head start is, as well as the clever (some might say "morally questionable") business decisions the company's CEO took along the way.

Everything led to where we are now, which is having both companies essentially controlling their home markets, with a third one—namely China—about to become the most important battleground that might even decide the winner.

As it stands, the numbers (provided by BuyAutoInsurance.com) show that Tesla has a very strong grasp on the U.S. EV market, with the Californian company's EVs accounting for 74 percent of the entire electric vehicle market over the past three years. The Volkswagen Group, by comparison, has a market share of under 3 percent.

If you look at VW's offer, the figures make a lot of sense. The only EV the company sold there for a long period was the now-retired e-Golf, with the rest of the group's brands (Porsche, Audi) only dealing in small-volume premium vehicles. Volkswagen Group's EV sales here barely make the tens of thousands count, whereas Tesla's sit at just over 430,000 units.

As we said, the situation is pretty much reversed over in Europe, even though the gap isn't as great as in the U.S. VW Group's rolling cumulative EV sales over the past 12 months (according to Schmidt Automotive Research) for western Europe are more than double Tesla's. Still, that's not what the company's main worry should be. It's actually the way the sales curve looks, showing a steep upright trajectory for Volkswagen and a flat-to-declining one for Tesla.

Just like VW's ambitions in China, Tesla's conquest of Europe hangs on the company's ability to expand its production infrastructure on the continent. The Berlin Gigafactory construction has been quite the saga, but it's nearing its completion now, and with talks of Tesla developing a cheaper, $25,000 hatchback in the near future, that might just be the model to win the Europeans over.

It might actually prove more difficult for the Volkswagen Group to make a more conclusive entry into the North American EV market. Porsche and Audi will never be high-volume sellers, so that task falls to Volkswagen. However, the initial reactions to the ID.4 are not very encouraging, and the German crossover might find it faces competition not just from Tesla but also Ford's Mustang Mach-E and the newly released South Korean twins, the Ioniq 5 and Kia EV6.

It looks as though each of the two will continue to dominate their respective home market for the time being, with China providing a neutral ground where both parties can still obtain supremacy.
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About the author: Vlad Mitrache
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"Boy meets car, boy loves car, boy gets journalism degree and starts job writing and editing at a car magazine" - 5/5. (Vlad Mitrache if he was a movie)
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