High Price of EV’s challenges the coronavirus pandemic

High Price of EV’s challenges the coronavirus pandemic

Volkswagen’s ambition is to become the next global frontier in EVs, even amidst the coronavirus pandemic. This company’s Zwickau assembly line is preparing to launch ID. 3 electric hatchback as part of its £33 billion projects of producing EVs by early 2024. The company hopes for a mass production patching 330000 cars yearly to overhaul Tesla Inc. 

The only significant challenge is the COVID-19 pandemic that threatens the collapse of the automobile industry. This challenge hinders the realization of VW’s ambitions since the majority of the employees are observing the lockdown measures. Additionally, the plummeting prices of oil render the gasoline-powered cars a viable alternative. 

Bruno Le Maire, the French finance minister, speculates that there will be a failure of early venturers of EVs like Renault if they don’t get government incentives. Another casualty is Toyota, whose profits are plunging below the threshold as set in the past ten years. 

Automakers whose investment is futuristic high-tech vehicles have to go all out for direct sales to meet their targets amidst the pandemic. Thomas Ulbrich, an executive of Volkswagen’s EV program, says that they are adhering to all the health measures while keeping their employees at work. These measures include the social distancing regulations as well as the wearing of masks. 

BloombergNEF warns that EV sales are likely to flop this year till the pandemic ends. Zwickau is one of the first automakers to restart operations amidst the countrywide lockdown in Germany. For this reason, they are improvising health measures for the employees to return to work. Therefore, production is currently a third of the initial output before the pandemic. Volkswagen worries that the current inventory of unsold cars can impede their ability to expand and sell the new mass stock of EVs. 

To curb these challenges, VW is improving its sales strategies to include test drives for home-based customers now that they are in lockdown. The firm is also advocating for online trading. The other significant challenge for these automakers is the scarcity of appropriate batteries. This challenge adds up to inadequate charging infrastructure in the cities. 

Other famous EV manufacturers are China-based. China seems to be the future for EVs with President Xi Jinping planning to institute laws that favor EV production. These policies are going to enhance China’s goal of being an industrial superpower. Various Chinese automakers hope for the government’s support to break-even. The research director of Fitch Ratings in Shanghai, Jing Yang, says that the government is ready to support both conventional vehicles and EVs until they fully transition to zero-emissions. 

On the other hand, the US is relenting on the transition to EVs. They are too analytical of the idea hoping that those transitioning to EVs can sell them their fuel. They consider EVs as a low-profit opportunity. However, some automakers in the country are adopting technology and investing in the electrification of their vehicles. Such strategists include Elon Musk, who is lowering the prices of his EVs to capture Tesla lovers with their flashy brands. This move is to challenge conventional petrol and fossil-fuel cars.

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