April 3rd, 2018 by James Ayre
The exec in charge of Ford’s business in Germany, Gunnar Herrmann, stated in a recent interview that the company could begin manufacturing plug-in electric vehicles in the country sometime in or after 2023.
The 2023 date is apparently due to the expected end of the Fiesta model lifecycle that year, according to Herrmann. Notably, in the interview with Handelsblatt, Herrmann also stated that the company would be happy if the German government was to provide state-level subsidies for the transition.
He stated: “Purely hypothetically that (2023) could be a good time for it.”
Interestingly, he was fairly blunt in his explanation of why production previous to that date wasn’t going to happen, having stated: “It will be possible if the sales’ numbers are moving up more powerfully. Unfortunately, today electric cars are not especially profitable yet.”
Reuters provides more: “He said it would take around 15 months to retool the company’s plant in Cologne but said it would not be worth the investment if sales of electric cars reached only 30,000 or 40,000 vehicles a year. … German premium carmaker BMW last week echoed Hermann’s comments, saying it would not mass produce electric cars until 2020 because its current technology is not profitable enough to scale up for volume production.”
Well, it sounds like Tesla is pretty much going to have the premium electric vehicle sector to itself indefinitely then, doesn’t it? Elsewhere, it appears that the only firms that seem to be willing to take an initial hit to their profit margins to secure long-term market share are Nissan, Renault, and to a lesser degree GM. I should qualify that by stating outside of China, that is.
That reality is one of the main reasons (along with battery production capacity and long-term minerals supply contracts) why I remain very skeptical that Tesla is facing anything but a rapid upward growth trajectory over the next decade. [Editor’s note: ditto.]