One of the largest automakers, Volkswagen is readying two Chinese factories to build electric cars next year. The plants will have a production capacity of 600,000 vehicles, as per the Volkswagen’s plans, which have not been previously reported, by revealing VW’s ability to industrialize production faster than other pioneers in the electric vehicle market.
The tech giant, Tesla, is still trying to reach its goal of making more than 500,000 cars a year by building a new factory in Shanghai, China, while VW can rely on an established workforce in two of its plants.
According to Reuters, the scale and speed of VW’s electrification push mark a shift in favor of established manufacturers that can use existing factories and profit from combustion engine sport utility vehicles to scale up faster than startups.
Tesla has proved itself as a serious competitor with a credible car, it’s Model 3. Volkswagen Chief Executive Herbert Diess stated to Reuters last week. But startups have a hard time entering mass production without sufficient production facilities, he said.
The energy station that supplies energy for VW’s flagship e-vehicle factory in Zwickau, Germany, marked by two tall chimneys, was built to power production of the combustion-engined Volkswagen Golf.
Reuters reported that the cutthroat rivalry between automakers and software companies started when tech giant Alphabet Inc’s Google presented a prototype autonomous vehicle in 2012, leading analysts and industry executives to fear a so-called Nokia moment.
This sort of situation happens when a new player from the tech sector unveils a superior design, in the way that Apple Inc presented the iPhone in 2007, ending Nokia’s dominance of the mobile handset business.