Challenges Facing Volkswagen in the Electric Vehicle Market

Volkswagen faces significant challenges in the electric vehicle (EV) market, primarily due to its inability to produce a competitive mass-market electric car. According to Moritz Schularick, President of the Kiel Institute for the World Economy, while the introduction of tariffs on Chinese EVs aims to mitigate competitive disadvantages, it is not a solution for Volkswagen's core issues.

The high tariffs, ranging from 7.8% to 35.3%, may increase the cost of EVs in Europe but fail to address the underlying problem of Chinese subsidies that benefit their manufacturers. As European automakers seek to level the playing field, the urgency for innovation in battery technology and electromobility is paramount.

Meanwhile, Volkswagen, once a dominant player in China, now struggles against local brands like BYD that have rapidly captured the market with appealing offerings. To navigate these turbulent waters, Volkswagen must pivot towards developing compelling electric models that resonate with modern consumers, or risk being seen as obsolete in an increasingly competitive landscape.