Tesla is pushing Volkswagen to accelerate the switch to electric vehicles, the company says of the competition

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Competition from new entrants in the German automotive market such as Tesla has prompted Volkswagen to accelerate plans to convert its main plant to the production of electric vehicles, the company said on Wednesday.

“There is no question that we have to deal with the competitiveness of our plant in Wolfsburg in view of new market participants,” said Volkswagen spokesman Michael Manske, referring to the advance of Tesla and new Chinese automakers in Europe.

“Tesla is setting new standards for productivity and scalability in Grünheide,” he said, referring to a Tesla factory under construction near Berlin, which will produce 5,000 to 10,000 cars per week at peak loads – more than twice as many battery electric vehicles in Germany (EV) production in 2020.

However, the spokesman denied a report published Wednesday in the Handelsblatt that said Volkswagen CEO Herbert Diess said at a board meeting in September that the switch to electric vehicles could cost up to 30,000 jobs in the company.

“There is now a debate going on and there are already a lot of good ideas. There are no concrete scenarios,” Manske said of the report.

A spokesman for the Volkswagen works council said that while there would be no comment on the speculation about Diess, “a reduction of 30,000 jobs is absurd and unfounded”.

Electric vehicles have far fewer parts than an internal combustion engine and therefore require fewer workers to produce. It is estimated that electrification could lose 100,000 jobs in the automotive industry by 2025.

German automakers are struggling to keep up with the more efficient production platforms of all-electric vehicle manufacturers. While Volkswagen currently needs around 30 hours to produce its ID.3 electric car, Tesla needs just 10 hours for a Model 3.

Diess had previously said that Tesla would fuel competition in Germany.

The Volkswagen plant in Wolfsburg, the largest plant in the world with over 50,000 employees, does not currently manufacture any electric vehicles, but the company plans to produce an electric sedan there from 2026 as part of a plan called “Project Trinity”.

The German auto giant is also considering listing its auto charging and energy businesses in addition to the existing IPO plans for its battery division, technology director Thomas Schmall told Manager Magazin in an interview published on Wednesday.

Nothing has been decided yet, said Schmall, that it will probably take up to two years before the new companies are ready for the stock market.

© Thomson Reuters 2021

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