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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Paris’ bike-share system, Vélib has long been considered one of the shining success stories of urban micromobility. With a massive fleet of over 20,000 pedal and electric-assist bicycles around Paris, the service has helped millions of residents and tourists get around the City of Light without needing a car or scooter. But lately, a growing problem is threatening to knock the wheels off this urban mobility marvel: theft and joyriding.
According to city officials and the service operator, more than 600 Vélib bikes are now going missing every single week. That’s over 30 bikes a day simply vanishing from the system – some stolen outright, others taken on “joy rides” and never returned.
“At the moment we’re missing 3,000 bikes,” explained Sylvain Raifaud, head of the Agemob company that currently operates the Velib system. That’s nearly 15% of over 20,000 Vélib bikes across Paris.
The sticky-fingered culprits aren’t necessarily professional thieves or organized crime rings. Instead, they’re often regular users who treat the shared bikes like disposable toys.
The city estimates that many people have figured out how to pry the bikes out of the system’s parking docks, unlocking one for a casual cruise and then ditching it somewhere far from a docking station.
Once pried free, the bikes are technically usable for the next 24 hours until their automatic locking feature kicks in. At that point, the bikes are often simply abandoned. Some end up in alleyways. Others get tossed in rivers. A few just disappear completely.
And since the bikes are intended to be parked at their many docking stations around the city, they don’t have GPS chips, further complicating recovery of “liberated” bikes.
The issue started small but has grown into more than an inconvenience – it’s beginning to undermine the entire purpose of the service. With bikes going missing at such a high rate, many Vélib docking stations are left empty, especially during rush hours.
Riders looking for a quick commute or a convenient hop across town are increasingly finding themselves without available bikes, or having to walk long distances to find a functioning one.
That kind of unreliability chips away at user confidence and threatens to drive potential riders back into cars, cabs, or other less sustainable forms of transport at a time when Paris has already made great strides to dramatically reduce car usage in the city.
The losses are financially painful, too. Replacing stolen or vandalized bikes isn’t cheap, and the resources spent on tracking down missing equipment or reinforcing anti-theft measures are stretching thin. Vélib has faced theft and vandalism issues before, especially during its early years, but this latest surge has officials sounding the alarm with renewed urgency.
Officials acknowledge that there’s no easy fix. Paris, like many cities with bike-share systems, walks a fine line between accessibility and accountability. Part of what makes Vélib so successful is its ease of use and widespread availability. But those same features make it vulnerable to misuse – especially when enforcement is limited and the consequences for abuse are minimal.
The timing of the problem is especially unfortunate. In recent years, Paris has seen impressive results in reducing car traffic, expanding bike lanes, and promoting cycling as a key part of its sustainable transport strategy. Vélib is a cornerstone of that plan. But if the system becomes too unreliable, it risks losing the very people it was designed to serve.
Meanwhile, as Parisians increasingly find themselves staring at empty docks, the challenge for the city and Vélib will be to restore confidence in the system without making it harder to use. That means striking the right balance between freedom and responsibility, between open access and protection against abuse.
In a city where cycling is supposed to be the future of mobility, losing thousands of bikes to joyriders and sticky fingers isn’t just frustrating; it’s unsustainable.
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