Volkswagen of America may not rebrand to “Voltswagen” after all, multipleoutlets report.
The brand – a subsidiary of Germany’s Volkswagen Group – announced plans Tuesday to rename its US operations “Voltswagen of America.” It said the brand’s battery-powered vehicles will have exterior “Voltswagen” badging, while its gas-powered cars will come with just the traditional VW emblem.
Now Volkswagen appears to be walking back the statement, according to multiple outlets citing sources familiar with the move.
The press release announcing the name change, published to VW of America’s website on March 30, was an April Fools’ joke, a Volkswagen spokesperson told The Wall Street Journal. The announcement was made up to drum up attention for VW’s upcoming electric vehicles, Reuters reported, citing three sources familiar.
The carmaker will officially retract the name change on Wednesday, multiple outlets report.
“We might be changing out our K for a T, but what we aren’t changing is this brand’s commitment to making best-in-class vehicles for drivers and people everywhere,” Scott Keogh, president and CEO of Voltswagen of America, said in a statement Tuesday. “This name change signifies a nod to our past as the peoples’ car and our firm belief that our future is in being the peoples’ electric car.”
CNBC initially reported the name change Monday, after a draft of Tuesday’s press release was accidentally posted to the brand’s website a month early. It was dated April 29, CNBC said, and was briefly online before being removed from VW’s website.
Volkswagen of America and Volkswagen Group representatives did not immediately return Insider’s requests for comment.
Volkswagen began delivering its first EV for the US market, the ID.4, in March. During a presentation in March, the Volkswagen Group laid out a wide-ranging strategy to overtake Tesla in the EV space. The plans included six European battery-production plants, new battery technology, and investments in charging infrastructure.
German car manufacturer Volkswagen rose by as much as 8.8% on Wednesday, extending the gains made the day before when it unveiled its plans for expansion in the electric vehicle market that could make it the world’s leading producer.
Shares were up as much as 8.8% at one point, at 291 euros ($346), their highest since November 2008 and set for a 25% gain so far this week. Volkswagen’s US-listed shares closed 10% higher on Tuesday.
At its “Power Day” on Monday, Volkswagen said it would build six electric vehicle battery factories across Europe and produce predominantly electric cars by 2030. This has triggered a surge in the value of its shares.
Volkswagen also stated it could significantly reduce battery production costs, which in turn would drive down electric vehicle retail prices, and invest into building an electric vehicle software infrastructure to be used across all of its brands.
Disruption in supply chains through factory closures, manufacturing interruptions and delivery delays have put pressure on the car manufacturing industry throughout the pandemic.
By shifting its focus towards electric vehicles over the past year and effectively emulating Tesla’s strategy, Europe’s largest carmaker has gained back a significant amount of ground. Volkswagen shares have risen by 180% since the market crash in March last year.
The company is aiming to dethrone Tesla as the global leading manufacturer of electric vehicles: “Our goal is to secure a pole position,” said Herbert Diess, CEO of Volkswagen, on “Power Day”.
Shares of Volkswagen surged 17% on Tuesday after the German car maker revealed plans aimed at dethroning Tesla as the world’s biggest manufacturer of electric cars by boosting key production capacities.
During its “Power Day” on Monday, the company presented its strategy to expand battery production in Europe, as well as massive plans to make investments in charging infrastructure. During the live stream in front of investors, executives said Volkswagen intends to build six battery production plants in Europe by 2030.
By improving its cell design, production processes, and materials, the company sees the possibility of decreasing battery costs by up to 50%.
“E-mobility has become core business for us,” Volkswagen Group CEO Herbert Diess said in a statement. “We are now systematically integrating additional stages in the value chain. We secure a long-term pole position in the race for the best battery and best customer experience in the age of zero-emission mobility.”
Volkswagen hasn’t been shy about its plan to catch up to Tesla and become the world’s biggest manufacturer of electric cars. And on Monday, the German automaker laid out an aggressive strategy to expand its battery production and make major investments in charging infrastructure.
VW announced the plans at its first “Power Day” presentation on Monday, which emulated Tesla’s previous “Battery Day” events. During the live stream, executives said the company plans to build six battery-production plants in Europe by 2030 in order to secure battery supply.
“E-mobility has become core business for us. We are now systematically integrating additional stages in the value chain. We secure a long-term pole position in the race for the best battery and best customer experience in the age of zero-emission mobility,” VW Group CEO Herbert Diess said in a statement.
VW said each plant will have the capacity to produce 40-gigawatt hours per year, for a total of 240-gigawatt hours annually by 2030. Like Tesla, VW is calling the plants “gigafactories.”
At Tesla’s Battery Day last September, CEO Elon Musk said the company would be able to produce 3 terawatt-hours of energy every year.
VW is building the first two plants in Salzgitter, Germany, and Skelleftea, Sweden, with the latter being a joint venture between VW and battery manufacturer Northvolt. On Monday, Northvolt announced a $14 billion battery order from VW over the next decade and said the carmaker has increased its stake in the company.
Through improvements in cell design, production processes, and materials, VW aims to decrease battery costs by up to 50%.
VW plans to invest €400 million, or about $477 million, to quintuple the number of fast-charging points in Europe by 2025. The efforts will be buoyed by partnerships with European energy companies.
Outside of the European market, the carmaker aims to add roughly 3,500 fast-charging points to its Electrify America network in the US and Canada this year, and plans to build 17,000 plugs in China by 2025.
The carmaker has big plans for at-home charging as well. During Power Day, it showed off a “wall box” – similar to Tesla’s Powerwall – that can store energy from a home’s solar panels and feed it to VW cars. The system will be bidirectional, so battery-powered cars can also feed energy back into a home, residential building, or business if needed.
Musk, similarly, generated months of buzz when he announced Tesla would hold a Battery Day without giving away specifics about what would be discussed. The CEO’s active Twitter feed and flashy presentations are a boon to Tesla, which doesn’t have an advertising budget.
Diess appears to be looking to emulate both those signature elements of Tesla’s business as of late. He joined Twitter in January and immediately posted a friendly jab at Musk about stealing “some of your market shares.”
And outside of Twitter, Diess hasn’t been shy about his mission to take on Tesla, the most valuable carmaker and by far the global leader in sales of electric vehicles. In a November blog post, Diess detailed a new effort to “catch up with Tesla” called “Mission T,” which involved accelerating software development and more effectively pooling hardware across Volkswagen’s brands.
Now, the group has developed several EVs across the Audi, Porsche, and Volkswagen brands, including a flagship battery-powered crossover for the US market called the ID.4. It plans to launch 70 electric models by 2030.
And some Wall Street analysts are optimistic about the carmaker’s prospects of rivaling Tesla in the EV space in the long term.
In a March 3 note, a team of analysts at UBS projected that Tesla and Volkswagen would comfortably be the largest producers of EVs by 2025. They estimated that Tesla would sell 2.3 million EVs that year, while Volkswagen would sell 2.6 million.
Michael Burry holds a stake in Volkswagen’s biggest shareholder, he revealed in a now-deleted tweet on Wednesday.
“I don’t own a Porsche, but I own the Porsche that owns VW that owns Porsche,” the investor said. He was referring to Porsche SE, the German holding company that owns 31.3% of Volkswagen, which itself owns Porsche AG, Audi, and other car brands.
Porsche SE and Burry’s Scion Asset Management didn’t immediately respond to requests for comment from Insider.
Burry is best known for his billion-dollar bet against the US housing bubble in the mid-2000s. His lucrative wager was immortalized in Michael Lewis’ book “The Big Short,” and he was played by Christian Bale in the movie adaptation.
The Scion chief’s indirect bet on Volkswagen is notable because the German auto group is taking on Tesla in the electric-vehicle market, and Burry was short Tesla as of December.
He predicted in January that shares in Elon Musk’s electric-vehicle company – which have skyrocketed by more than 600% since the start of 2020 – would suffer a massive collapse. “Enjoy it while it lasts,” he said.
Burry disclosed his Porsche SE position after trumpeting Volkswagen in several tweets.
“Investors, partly due to the #ESGFog, underestimate the size, scale, brands, staying power, and resources of Volkswagen,” he said. The investor linked to a Bloomberg story about a UBS analysis that found Volkswagen’s ID.3 electric car stacked up well against Tesla’s models.
“Ever wonder who owns Bentley, Bugatti, Lamborghini, Porsche, Ducati, etc? VW,” Burry said in another tweet. “Although, Porsche owns VW too. Interested why VW and Porsche do not trade in the US? Because what US investors think is not too important to VW or Porsche.”
Burry’s championing of Volkswagen and his stake in its largest shareholder, coupled with his criticism of Tesla and short position, strongly suggest he’s expecting the German automaker to trounce Musk’s upstart rival.
A global shortage of computer chips has caused shutdowns at several automotive manufacturing plants – and car dealerships are already reflecting the shortage.
Car shoppers can expect to see an impact in the availability of certain car models due to the chip shortage, as well as a price increase, according to Cars.com executive editor Joe Wiesenfelder. Dealerships may also be less likely to offer deals as supplies dwindle.
“Consumers in the market of considering buying a car should shop now because choices and prices could worsen over the next two quarters,” Wiesenfelder told Insider.
Car companies began halting production at manufacturing plants in North America in the beginning of January.
Semiconductor chips have become an essential part of the manufacturing process for vehicles. The chips are used in navigation, bluetooth, and collision-detection systems and account for about 40% of a new car’s cost, according to a report from Deloitte.
The lack of chips has forced automakers to prioritize production of their higher-priced and more-profitable models.
Here are some of the models Cars.com said may see price increases or limited availability.
Toyota has already started increasing prices
The Toyota Tundra was one of the first cars to see a halt in production.
Cars.com said the Tundra has seen a drop in inventory of almost 27% for the month of February. Some Toyota models have already demonstrated price increases, including the Tacoma, which has gone up about $584 or 1.6%, despite only a 4% decrease in inventory, according to Cars.com.
Many Japanese carmakers are seeing an impact. Honda was one of the first car companies to warn of computer chip shortages, according to Bloomberg.
The Japanese carmaker has slashed production at several major manufacturing plants. In particular, shoppers can expect to see some pressure on the Honda Accord, Civic, Insight, and Odyssey, as well as the Acura RDX.
Nissan has had to adjust production in both Japan and North America. A spokesperson told Insider the company is continuing to assess the long-term impact of the chip shortage. For now, the models that have seen slowdowns for the carmaker include the Nissan Altima, Frontier, and Titan.
In February, Subaru reported it planned to cut its production plan for 2021 by about 58,000 cars. The models impacted by the cut include the Subaru Ascent, Impreza, Legacy, and Outback.
Ford and General Motors expect to lose billions of dollars
Ford began slowing down production at its plant in Louisville in January. During Ford’s fourth-quarter earnings call, CFO John Lawler said the chip shortage could cut the company’s first-quarter production by 10% to 20% – a $2.5 billion hit to revenue.
The car models that will be impacted by cuts at Ford plants include the Ford Escape and Lincoln Corsair, which are produced at the Louisville plant. Cars.com said there will also be declines in production of the Ford Edge and Explorer, as well as the Lincoln Aviator and Lincoln Nautilus.
The company announced last week that it was closing three of its North American plants. The manufacturing sites will remain closed until at least mid-March.
The closures are expected to impact the Buick Encore, Cadillac XT4, and GMC Terrain. The company’s Chevrolet line will also see some slowdowns, as the sites that produce Chevrolet Equinox, Malibu, and Trax have been impacted.
Fiat Chrysler and Volkswagen also feel the pinch
In January Fiat Chrysler suspended operations at plants in Ontario and Mexico. The slowdowns will impact several Chrysler, Dodge, and Jeep products. Cars.com said dealerships will likely have lower inventories for the Chrysler 300, Pacifica, and Voyager. The Dodge Challenger and Charger may be in shorter supply, as well as the Jeep Cherokee and Compass.
BMW, Mercedes-Benz, and Volkswagen were some of the first car companies overseas to report shortages. In December, Volkswagen had already begun lowering production rates. The Volkswagen Atlas, Atlas Cross Sport, and Passat have already been impacted by the supply disruption.
Toyota, Honda, Subaru, Ford, GM, Fiat Chrysler, and Volkswagen did not respond in time to comment.