VW lags in its most important market as Tesla, EV makers become go-to for new tech
Europe’s largest automaker, Volkswagen, may be on the edge of another crisis. VW is losing market share in its most important market, China, as Tesla and other EV makers in the region widen their lead. Those same Chinese automakers are now turning their sights on Europe, VW’s home market.
Earlier this year, Thomas Shafer, CEO of Volkswagen Passenger Cars, was quoted by German publication Manager Magazin, saying, “The roof structure is on fire. This is the final wake-up call.”
The comments, made at a management meeting, were largely due to the automaker losing market share in China.
China is an important (if not the most important) market for VW. The German automaker dominated the market for decades, generating almost half its earnings.
However, times are changing, and Volkswagen is lagging. The transition to EVs in China caught VW flat-footed. During the pandemic, EV makers in the region, such as BYD, NIO, XPeng, and others, doubled the number of electrified options. Many of which are offered cheaper than VW models.
According to Automotive News, after a top executive was sent to China to assess the competition, the message relayed back to CEO Oliver Blume was bleak.
Volkswagen struggles as China’s EV makers expand
The executive told his new boss that Volkswagen was losing the EV race in one of its key markets, and the hopes of catching up didn’t look promising.
Rather than Audi’s having the “Vorsprung durch Technik” or advantage through technology, now Tesla and EV makers from China have become the go-to for new features and tech.
And now VW may have a bigger problem on their hands. These EV pioneers in China are headed for Europe.
The transition was evident at this year’s IAA Mobility in Munich, with China’s EV presence doubling compared to 2021. China’s EV leaders like BYD and SAIC’s MG showed off impressive models aimed at the EU market, like the BYD SEAL electric sedan with up to 570 km (354 mi) range starting at 45,000 euros (about $48,000).
NIO also launched the ET5 Touring, its first electric station wagon this summer, aimed at European automakers like Porsche and BMW.
VW is trying to right the ship, which involves overhauling its software unit and collaborating with outside partners. In July, the company invested $700 million into Chinese EV maker XPeng for a nearly 5% stake to develop new models and reverse its fallout in the region.
The move came after VW’s luxury brand Audi and Chinese state-owned SAIC Motor established a long-term partnership to develop new EV models in the region.
Outside of China, Volkswagen placed a large-scale order for battery systems assemblies with Hyundai’s supplier, Hyundai Mobis.
Rival luxury automakers BMW and Mercedes-Benz also revealed their visions for the future with BMW’s Neue Klasse and Mercedes’ first entry-level EV concept. The new models aim to counter lower-priced and often better-equipped EVs from Tesla and Chinese automakers moving onto its home turf.
Electrek’s Take
Despite the share of EVs shipped to Germany from China more than tripling in the first three months of 2023, Blume believes VW still has the advantage in Europe.
In Blume’s own words, they will “not be able to offer the level of costs they offer in China in Europe.” He explained that because of the high costs associated with adapting vehicles to European requirements and establishing a sales network, prices are doubling overseas.
Volkswagen has already slashed prices on its ID.3 and ID.4 electric models in China to keep up with the competition. Is the same destined to happen in its home market? Automakers like BYD, NIO, and others continue expanding their presence. If VW doesn’t turn it around quickly, they will likely have a bigger problem.
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The Stripe logo on a smartphone with U.S. dollar banknotes in the background.
Budrul Chukrut | SOPA Images | LightRocket via Getty Images
Stripe cut 300 jobs, representing about 3.5% of its workforce, mostly in product, engineering and operations, CNBC has confirmed.
The payments company, valued at about $70 billion in the private markets, still expects to increase headcount by 10,000 by the end of the year, which would be a 17% increase, and is “not slowing down hiring,” according to a memo to staff from Chief People Office Rob McIntosh. Business Insider reported earlier on the cuts and the memo.
A Stripe spokesperson also confirmed to CNBC that a cartoon image of a duck with text that read, “US-Non-California Duck,” was accidentally attached as a PDF to emails sent to some of the employees who were laid off. Some of the emails mistakenly provided affected employees with an incorrect termination date, the spokesperson said.
McIntosh sent a follow-up email to staffers apologizing for the “notification error” and “any confusion it caused.”
“Corrected and full notifications have since been sent to all impacted Stripes,” he wrote.
In 2022, Stripe cut roughly 1,100 jobs, or 14% of its workers, downsizing alongside most of the tech industry, as soaring inflation and rising interest rates forced companies to focus on profits over growth. The Information reported that Stripe had a few dozen layoffs in its recruiting department in 2023.
Stripe’s valuation sank from a peak of $95 billion in 2021 to $50 billion in 2023, before reportedly rebounding to $70 billion last year as part of a secondary share sale. The company ranked third on last year’s CNBC Disruptor 50 list.
In October, Stripe agreed to pay $1.1 billion for crypto startup Bridge Network, whose technology is focused on making it easy for businesses to transact using digital currencies.
Brothers Patrick and John Collison, who founded Stripe in 2010, have intentionally steered clear of the public markets and have given no indication that an offering is on the near-term horizon. Total payment volume at the company surpassed $1 trillion in 2023.
WATCH: Early Bridge investor weighs in on $1.1 billion Stripe deal
Thinking about upgrading your EV? Rivian (RIVN) launched a new promo on Tuesday, offering up to $6,000 to upgrade your R1S or R1T. Here’s how you can snag some savings.
Rivian R1S and R1T upgrade deal offers up to $6,000
Rivian delivered over 51,500 vehicles last year as the EV maker gains momentum. Although it was only slightly higher than the ~50,100 delivered in 2023, Rivian is expected to see even more growth this year.
After shutting down its Normal, IL manufacturing plant last April and renegotiating supplier contracts, Rivian has seen “significant cost improvements,” according to CEO RJ Scaringe.
Rivian also began delivering its next-gen R1S and R1T models last year. The new Large and Max battery packs have redesigned modules and more efficient packaging, “making them easier to manufacture and service.” For example, Rivian’s new EVs use seven ECUs, down from 17 in the first-generation R1T and R1S.
With new plant upgrades, reworked supplier contracts, and more efficient vehicles, Rivian is now passing the savings on to customers.
Rivian introduced a new promo on Tuesday, offering up to $6,000 to upgrade your R1T or R1S. The bonus amount varies by trim:
- Tri with Max battery: $6,000 USD / CAD 8,600
- Dual with Max battery and Performance upgrade: $4,500 USD / CAD 6,500
- Dual with Max battery: $3,000 USD / CAD 4,300
The offer is for current R1T or R1S owners or lessees in the US and Canada. Rivian launched the new promo on January 21, and it runs through March 31, 2025.
After you purchase or lease a qualifying vehicle, Rivian will apply a discount toward the MSRP. You must take delivery by March 31, 2025. In the fine print, Rivian stated, “You must request a trade-in estimate to qualify for this offer, but trade-in of a vehicle is not required.”
Any other models are excluded from the offer. These include Dual Standard configurations, Dual with Large battery configurations, custom builds, demo vehicles, and pre-owned vehicles.
The new offer follows Rivian’s previous upgrade promo introduced last October, giving qualifying gas-powered vehicle owners or lessees up to $3,000.
Check out the Rivian R1 Shop to view eligible models. You can see eligible Rivian R1S here and R1T models here.
Electrek’s Take
Rivian’s R1S was already the tenth best-selling electric vehicle in the US last year, with nearly 27,000 models sold. With more driving range and power at a lower cost, the electric SUV could see even more demand in 2025.
Then again, with the arrival of new luxury electric SUVs, like the Jeep Wagoneer S and Volvo EX90, Rivian will face more competition in the US.
Rivian’s latest promo comes as the Company looks to carry the momentum from the end of 2024 into the new year. The EV maker is offering other deals, including 1.99% APR for 60 months on the R1 Dual with a Max Battery and Performance upgrade.
Even if you are not eligible for the promo, we can still help you find deals on Rivian’s electric SUV in your area. You can use our links below to view offers on the Rivian R1S and R1T near you today.
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