According to Volkswagen Group, there are 130 brands are competing for a share of the EV and plug-in hybrid sales. The result of such an oversaturated supply is that almost no one is able to earn a positive return.
“That means there’s no money left over to invest in the future,” VW exec Ralf Brandstätter told German business daily Handelsblatt in an interview published Tuesday. “China’s car market has lost all reason.”
Given the brutal conditions in the market, VW has declared 2025 to be a year of transition. Only starting next year on does it expect to have attractive products that do not need to compete with the likes of BYD and Xiaomi on price alone.
These begin with volume models built on the China-specific Compact Main Platform (“CMP”), potentially including a model sold under its Jetta brand for the equivalent of about €15,000 (about $17,500). The new cars continue in 2027 with more upscale models underpinned by the China Scalable Platform (“CSP”).
Until then it won’t chase after sales with ever increasing incentives just to move metal gathering dust on dealer lots.
“In such an unhealthy market environment, our share is not important,” Brandstätter claimed. “Those only capable of selling their cars through rebates are damaging their brand.”
Volkswagen serves as a litmus test of a legacy carmaker’s desire to adapt and change with the times as demand shifts from gas-powered cars relying on mechanical innards like pistons and camshafts to EVs defined by their high-tech software features.
