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Volkswagen cuts jobs as demand for EVs plunges

53 points| Fervicus | 2 years ago |fortune.com | reply

135 comments

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[+] siffland|2 years ago|reply
Working in Tech, I love a lot about electric cars. I just have a few issues I cannot seem to overcome (this is a personal ME thing about EV's and some new gas vehicles, your mileage may vary....pun intended).

All new cars spy on you (well most do), but EV's are completely software driven and seem to be more intrusive. I want a car I can connect to the internet when I want to for updates and that is it. I also want android auto and the apple one for my wife, I do not want a proprietary (Tesla) entertainment system.

I want right to repair. It is my car if I spend that much on it, I want to do to it whatever I want.

I want all the equipment in the car to work when i purchase it and no monthly fees (I get it for XM Radio, I am talking like seat heaters and such).

For some reason it also irritates me Tesla can increase mileage with a flip of a switch (Like they were going to do in Florida for a hurricane a while back). So you are telling me they could of been build with smaller batteries and save money and the environment, but they were not so you could have a software upgrade (or was that a monthly payment as well). Also the fact Tesla can remote disable my vehicle, and purchased upgrades do not transfer to the new owner.

I can probably go on and on with my whining, but that is why i still have 2 gas guzzlers and a motorcycle (newest vehicle is 2008, 2005 Honda van has 270,000 miles on it). They are paid for an yes a little maintenance here and there but that is not enough to make me spend $30k + on an electric vehicle.

[+] LeifCarrotson|2 years ago|reply
> So you are telling me they could of been build with smaller batteries and save money and the environment, but they were not...

If you charge and discharge a lithium ion cell from 4.2V to 2.75V, you might get 250 full cycles. If you stop charging at 4V and call that 100%, and stop discharging at 3.2V, you might get 2000 cycles before capacity is reduced.

Phone and laptop manufacturers prefer to burn the battery out in 2 years, car manufacturers want to sell bigger packs and are afraid consumers will rebel if a BEV needs a replacement battery at 100k miles.

Neither, for reasons unclear to me, allow the owner to make that decision.

[+] Fervicus|2 years ago|reply
We seem to be inching more and more towards the dystopian future we always feared. The sad thing is we seem to be willingly and collectively marching towards it ourselves.
[+] dzhiurgis|2 years ago|reply
> I also want android auto and the apple one for my wife, I do not want a proprietary (Tesla) entertainment system.

Having used Carplay recently after few months in Tesla I couldn't believe how crap it was. Can't pinch and zoom map, can't use maps on your phone while you navigate (how do I add additional stop without using screen), it wouldn't connect about 10% of drives. Overall UX is feels about a decade behind - a bit like OEM systems before Carplay.

[+] _hypx|2 years ago|reply
BEVs are a dead end technology because they are far more expensive than the cars they are replacing. There is no way this market is going to survive once the subsidies and government support ends. People with brains are finally realizing that it is time to move on and towards some other technology.
[+] GenerWork|2 years ago|reply
Key part of the article: "But orders from corporate clients — which account for around 70% of the IDs built at the plant — have been plummeting since a federal subsidy for battery-powered company vehicles expired this month, one of the people said."
[+] petee|2 years ago|reply
Is there really any surprise no one wants to pay $45000 for a compact car? What is the profit margin on EVs that its cheaper to not sell cars versus making them affordable and within reach of more customers?

Edit: actually I can't tell if thats their cheapest car, VWs website sucks on mobile so I gave up. You'd think it'd be easy to just show the prices

[+] fbdab103|2 years ago|reply
VW's site sucks on desktop as well. Ultra-wide monitor and I have to use a hamburger menu to see the navigation bar.

Using the VW filters, the only electric that I see is the ID.4 SUV starting at $39k.

Edit: Just went to Honda and the cheapest electric options are a CR-V hybrid at $29.5k or the Accord Hybrid at $32k.

[+] micromacrofoot|2 years ago|reply
the decline is mostly because a government subsidy ended
[+] AniseAbyss|2 years ago|reply
Volkswagen got big (it's in the name) with building affordable cars like the Beetle and the Golf. Compact fuel efficient cars that a nurse or teacher could afford.
[+] cs702|2 years ago|reply
Correction: ...as demand for non-Tesla EVs plunges.

Demand for Tesla EVs is... booming. Tesla sold 83% more cars in the most recent quarter than in the same quarter a year ago.[a]

[a] https://digitalassets.tesla.com/tesla-contents/image/upload/...

[+] bradly|2 years ago|reply
The actual article has the following title for me: VW is cutting jobs at its German EV factory because demand is plunging

The HN title is: Volkswagen cuts jobs as demand for EVs plunges

Not sure why the difference but the article cites Tesla demand of one of the key reasons the demand "is plunging"

[+] bearjaws|2 years ago|reply
They just cut the price on the model x and s.

They have thousands of model ys with discounts on their website as they are waiting to be sold at a dealership.

That not even including all the huge promotions on the model 3.

I wouldn't say Tesla isn't at least slowing down based on their nearly 3 month old earnings report.

[+] yumraj|2 years ago|reply
Tesla’s been dropping price, so they too must be seeing softening demand.
[+] leptons|2 years ago|reply
I don't think interest is plunging at all, the problem is the price is too damn high. Wages aren't increasing as much as the price for new cars has.
[+] agumonkey|2 years ago|reply
What causes Tesla's demand to be so high ? price only ? or did VW EV effort failed ? I didn't read about it but it, but last year or so, IDn cars prototypes were reviewed favorably.
[+] surfingdino|2 years ago|reply
EVs are a hard sell. Range anxiety is not an issue, but the charging infrastructure is. The cost is also too high for the average buyer at this time.
[+] yieldcrv|2 years ago|reply
yeah everything non-Tesla is a complete non-starter for me until they actually use the harmonized charging network, so I guess the 2025 models?

Tesla models are a somewhat starter, too few options in look

and then the price

and its a weird quagmire, the people that can afford to live in dense high cost of livings cities are the exact target audience for EV’s but have the most perplexing and inconvenient charging arrangements, while suburban homeowners are like “I just slow charge everynight to an AC outlet in my garage, you’ll never notice the range, its not an issue bro” completely oblivious about the problem

then once the harmonized charging network takes off, its not even clear if the electric grid can handle it, which isnt my problem for sure, but funny to think about. solve this issue and the next one comes quickly

[+] pornel|2 years ago|reply
Germany has a very good charging infrastructure. Fastned and Ionity networks are along all major routes, and have tons of 300kW chargers.
[+] holoduke|2 years ago|reply
Who is buying a new car these days anyway? Maybe the older generation who are living in their cheap paid off homes. But i dont know anyone below 50 who ever bought a new car. 50k for a small refrigerator? Compared to a 10 year old bigger car for 15k with similar operating costs and no hassle.
[+] edmundsauto|2 years ago|reply
The used car market has gotten expensive, you’re not saving much for a similar vehicle. And a 10 year old vehicle at that price point is, in the average case, absolutely not going to cost the same in maintenance.

The pendulum for new versus used has swung far in the direction of new cars, compared to a decade ago. The caveat is that it might take 6 months to get a new car due to inventory issues. I think used is much more expensive because it’s nearly the only option, regardless of cost, for folks who need a car this week.

[+] dieortin|2 years ago|reply
> Compared to a 10 year old bigger car

Why does so many people act like the bigger a car is, the better?

[+] paulryanrogers|2 years ago|reply
Having mostly owned 10+yo cars, there is a significant repair cost that randomly recurs. And the frequency trends upward with the car age.
[+] User23|2 years ago|reply
I bought a new car in April of 2020 and it was a screaming deal. Paid 3k under MSRP for a prestige trim and the total price was in the 20s. Maybe your friends just don't know a buying opportunity when it comes around?
[+] bluenose69|2 years ago|reply
If the title had a "their" after the "for", it would make a bit more sense. Maybe people who want e-vehicles are just not interested in VW nowadays.

VW once had quite a lot of brand loyalty, because they made good products and changed them incrementally, according to engineering decisions. That's not true now, with so many different styles being made available that it's hard to keep track, with odd finishing decisions (those horrid screens on the dashboard make it anything but a drivers' car). Heck, I saw a video of a test drive that talked about the gear shifter coming out of its attachment as the driver made an aggressive shift. I drove VWs for years, and I never one thought the gear shifter would come lose.

It seems like MBAs are making decisions at VW, and not driving enthusiasts.

Here's a thought for VW: electrify the car that made you so much money for so many years (the plain golf) and see what happens to your bottom line.

[+] jeremiahbuckley|2 years ago|reply
Considering how many times our 5yo VW has been in the shop for major system breaks, I wouldn’t want to get a whole-new-drivetrain VW without massive warranty protection. We have a 15yo Toyota that’s been in the shop far less.

Plus, (a) reviews for the electric VW aren’t impressed, (b) [charging] network matters, (c) pay the VW “premium” for first-gen tech? Seems like a poor bet.

[+] drumhead|2 years ago|reply
The EU will do what they did when the Japanese car industry was about to crush it, they'll slap tariffs on Chinese EV imports to protect Thier domestic industry until they're in a position to be competitive.
[+] wolverine876|2 years ago|reply
The corporate news is the same story, over and over: Cut 5-15% of workforce because of the 'economy'. Meanwhile the economy keeps doing well, so people are making money.

I suspect there's another reason for the cuts, but the following is just BS. I'm hoping someone knows something substantive - a paper, a book, a term for it, etc.:

I often see a new management philosophy of hyper-aggression and disdain for all but money, treating labor (and nursing home patients, healthcare patients, journalism, students, etc.) as commodities to squeeze rather than contributors (and human beings and social goods) to value; treating profit as an outcome of squeezing every dollar/euro possible from everything rather than innovating productivity for society. No, it hasn't always been that way; remember Silicon Valley leaders treating their employees with respect, with flat hierarchies, 20% time dedicated to personal projects, etc etc.

[+] ianai|2 years ago|reply
US has had decades of thumping the mantra “MBAs are the smartest people on earth, just give them whatever they want and they'll solve all problems.” (edit-this was at the highest levels of government.) That idea has come home to roost. Lo and behold, those MBAs think non-MBAs are dime a dozen (even phds) and smart people are all in management. (They also thought computers and automation would eventually make every non-management position obsolete or commoditized.)

The law long ago turned on workers largely too. HR takes managements side unless the manager is literally breaking the law and the worker has an airtight case with evidence and especially witnesses. So to be an employee means you need an understanding of the law on par with an entire HR department or learn to always say “yes.”

[+] ggm|2 years ago|reply
I wish there was a law to expose for all products the rate of profit, and the implicit and explicit subsidies. It's impossible to know how EV margins compare to e.g. a minivan or a golf classic ICE.
[+] Nevermark|2 years ago|reply
It is always strange to see a large industry getting disrupted, in slow motion, in plain sight.

The problem is, the leader of a new product direction has not just perfected the new tech, but identified and grown a new market segment and captured a new customer base.

The followers not only have to catch up with technology, but find new market segments with latent customers for their version of the new technology. After the original company scooped up all the low hanging market fruit.

That is a sneaky double whammy they don't plan for when they initially wait things out.

[+] ppetty|2 years ago|reply
New car. Small car. Expensive car. And, electric car. I don’t think this is entirely an electric vehicle issue. Interest rates and high prices for small cars seems bad enough. If the specs were the same & it was gas even at a slightly lower price; I doubt VWs are hot sellers. I think this might be trust related too. It was smart for VW to pivot from previous fuel sources they gamed, but how much do you trust the specs now that they’re EVs?
[+] version_five|2 years ago|reply
Canada has given them an 11 figure subsidy to build EVs here... I wonder how that will play out if there is not the demand.
[+] tzs|2 years ago|reply
The article is talking about demand in Germany, which fell because a subsidy for corporate buyers expired leading to a large drop in German corporate EV purchases. 70% of the EVs from a particular VW plant in Germany went to corporate buyers, so they are making cuts at that plant.

It doesn't really have implications for other EV plants or other countries.

[+] rj45jackattack|2 years ago|reply
I'm sure current interest rates have nothing to do with it :/
[+] b112|2 years ago|reply
That's a good point. Likely, rates have mostly peaked. There will potentially be downward pressure soon.

On top of that, many cars are hard to get. Low production, backlogged demand. This means fewer deals on finance and lease rates.

I remember 0% lease and finance rates, 15 years ago when the interest rate was this high, because car companies wanted to move product. But now they have no need, not with them unable to supply demand.

So my point is, I decided to keep my current car longer. Rates matter.

[+] vsskanth|2 years ago|reply
Demand for (VW) EVs plunges. It's important to note that their EVs have been universally panned with reviewers straight up recommending NOT to buy VW EVs due to all the software bugs
[+] bilsbie|2 years ago|reply
Range and price still holding me back. I’d love to own one otherwise.
[+] sircastor|2 years ago|reply
I’d encourage you to log your actual driving for a week or two, along with how long your vehicle sits idle. Most range anxiety (IMO) is a supposed of opportunity cost rather than actual risk.

Like companies assuming piracy is equal to a lost sale. It might be true in some cases, but not all. Also, most late model EVs offer a couple hundred miles on a single charge.

[+] makeitdouble|2 years ago|reply
> At the same time, Volkswagen is following Tesla, BMW AG and others in exporting an EV from lower-cost China to Europe. Its Cupra brand has announced plans to produce the Tavascan SUV at a factory in Anhui. Built on the same hardware and software platforms as the ID series, the model is due to hit the European market in 2024.

So, once again the only country to manufacture cutting edge technology goods at scale and at a reasonable cost ends up being China.

The geopolitical landscape when China's EV domination fully expends will be something else entirely...

[+] cf141q5325|2 years ago|reply
I am not so sure this is a bad thing. Electric vehicles still seem to be part of the same pattern of planed obsolesce and profitable waste production. Looking at the production and expected lifetime sustainability seems little more then an image from the marketing campaign. Not a surprise but maybe something worth mentioning given the hype.
[+] elif|2 years ago|reply
My daily driver is over a decade old and has only ever entered a tire shop.

It was the first generation of EV.

When should I plan it's obsolescence?

What is your experience with EV expiration that leads you to your conclusion? Please inform me in any form other than links to idle speculation by obviously biased parties like Motor Trend etc.

[+] Bud|2 years ago|reply

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