Daring driving is likely to come to a halt. Automakers betting on ambitious EV sales risk a similar end. For example, the current market leaders, Volkswagen and Tesla, who will have to dominate the sector to live up to the expectations of investors and their own. That seems unlikely.
The electric vehicle boom pushed Tesla’s stock of $ 639 billion (€ 529 billion) into the stratosphere last year, when Elon Musk’s engines accounted for about a quarter of global sales.
Some of that is starting to rub off on the € 120 billion Volkswagen, whose shares are up two-fifths this year. Its CEO, Herbert Diess, expects to sell up to 3 million electric vehicles in 2025. That would even exceed the 2.35 million units Musk’s group is expected to sell that year, according to the consensus compiled by the company.
Achieving those goals will require imaginative driving. The global market for battery vehicles could total 13.7 million in 2025, according to the average of Jefferies and UBS forecasts. This means that the two companies will account for almost two-fifths of future sales, with VW’s market share reaching 22% – about double its share of the global automotive market last year, according to LMC data. Automotive – and a Tesla position that will only drop, modestly, to 17%.
Considering the projections of the competitors, it seems bizarre. Volvo Cars, owned by China’s Zhejiang Geely, and Mercedes, owned by Daimler, estimate that electric cars will account for half and a quarter of their sales, respectively, in 2025, representing some 900,000 cars combined, based on previous deliveries. to the pandemic.
The American General Motors is targeting another million electric vehicles. For its part, the Japanese giant Toyota aims to make 5.5 million “electrified” vehicles, of which perhaps half will run entirely on batteries. If you add just these automakers, only a quarter of the market remains for companies like China’s SAIC, Nissan, South Korea’s Hyundai, Ford, Stellantis and Renault.
VW and Tesla could live up to the hype if their current leadership allows them to oust their counterparts and gain more market share, or if the market grows faster than anticipated. However, in Norway, the world’s most advanced electric car market, Tesla’s Model 3 lost the top seller last year. And Morgan Stanley estimates that as many as 10 new battery car players will enter the market by the middle of the decade.
If electric vehicles turn out to be as competitive as gasoline, investors betting on sweeping winners risk a chaotic collision.
The authors are columnists for Reuters Breakingviews. Opinions are yours. The translation, of Carlos Gomez Down, it is the responsibility of Five days