German carmaker Volkswagen’s (VW) CEO Herbert Diess said he is adamant the company could overtake Tesla’s position as the biggest electric vehicle seller by 2025.
Diess is self-confident in his claim as VW's electric vehicles (EVs) are already sold out for the year in the U.S. and Europe. VW, the world’s second-largest electric vehicle manufacturer, has sold more than 99,000 electric models from its various brands, such as Porsche, Audi, and Škoda, in the first quarter of 2022.
Speaking to CNBC’s "Squawk Box Europe" at the World Economic Forum in Davos, Switzerland, Diess said that alleviating supply chain issues would likely help create some momentum for Volkswagen over the next months.
VW closely follows Tesla in the global market share. The German carmaker's market share is 11.28 percent, while Tesla’s market share is 13.84 percent.
Diess said that "markets are always about the future," thus, consumers are more excited about Telsa's offerings than traditional carmakers, but he still claimed that his company will catch up and ultimately surpass its competitor by 2025.
Volkswagen's CEO praised Tesla’s business model, which lets it reap high returns and good results, but he warned that expanding a business is challenging.
Tesla was already well-established before opening any new factories, though opening two factories at a time during a global crisis proves to be a monumental challenge.
"I think for Tesla, also, ramping up now will probably be a bit more challenging. They are opening up new plants, and we are trying to keep up speed. We think, in the second half of the year, we are going to create some momentum," Diess said.
Supply problems to be eased in the second half
Even though it has been two years since the beginning of the COVID-19 pandemic, carmakers still struggle with the challenges of the disrupted supply chain. Shortages of critical supplies, primarily used battery production, are expected to be an obstacle standing in front of the growth of electric vehicle sales in the years ahead.
However, Diess remains confident. He said he believes there are signs the chip shortage could begin to ease after the middle of this year. He said supply chains appear to be "getting in order again," and added, "I would say that we would see an alleviation of this situation towards mid-year and second half we should be in better shape — if the situation is not getting any worse, which I don’t think so."
We are curious about the leader of the electric vehicle market by 2025 and whether it will be Volkswagen or Tesla. Regardless of who takes the ticket, though, it is good for the environment that electric vehicles are reaching large masses.