Here’s why Bloomberg thinks Volkswagen’s EV sales will overtake Tesla’s by 2024

According to a comprehensive report released this morning by research firm Bloomberg Intelligence, Tesla will retain its global EV sales crown for the next 18 months, but will then be usurped by Volkswagen’s EVs. BEV’s comprehensive outlook report projects that many traditional automakers will lag sales through 2025, but Volkswagen is on track to overtake Tesla’s production volume by 2024.

Both Volkswagen and Tesla are big names in automobiles, so we’ll spare you their history lessons. While the latter has been all-electric since day one, the former has made more recent efforts to embrace BEVs and has done so much more aggressively than other mainstream automakers.

Maybe this emissions scandal put a little chip on Volkswagen’s shoulder to motivate a change in its public image – either way, it works. Last fall, we reported that Volkswagen was increasing sales and deliveries of electric vehicles at a staggering rate, recording annual growth well over 100%.

This trend has continued into 2022 as demand for BEVs increases alongside the number of VW models available. While Volkswagen is still watching Tesla’s back, the German automaker is gaining traction.

Tesla, on the other hand, continues its very public role as the darling of electric vehicle adoption, sporting a crown adorned with badges like a market capitalization of $686 billion and hundreds of thousands of units produced each quarter. With new gigafactories ramping up in Berlin and Austin, Tesla has no intention of slowing down, despite multiple setbacks.

In light of Tesla’s growing efforts, Bloomberg Intelligence believes the US automaker’s days as the number one BEV seller are numbered and Volkswagen is next.

Source: Bloomberg Intelligence

Electric vehicle sales in 2025 will be led by Volkswagen, then Tesla and BYD

Research firm Bloomberg Intelligence (BI) shared a summary of its new report this morning, which included the sales prediction chart you see above. The full report, titled “Battery Electric Vehicles Report – Automakers Race to the Top” is available for download and specifically predicts BEV sales for major automakers through 2025.

The report suggests that most mainstream automakers will not be able to divest BEV-related assets from their production of combustion vehicles, as these gasoline models help fund the transition to BEV models. Volkswagen, however, is an exception, thanks in part to an IPO of its Porsche brand expected in the fourth quarter of this year.

According to the report, projected BEV sales mixes of 30% in 2023 and around 45% in 2025 could help boost Volkswagen’s valuation for the IPO, providing even more cash flow to accelerate its transition to electrification. Michael Dean, senior European auto industry analyst at Bloomberg Intelligence, spoke about the future of electric vehicle sales, predicting when other automakers might catch up with Tesla:

Going forward, automakers in Europe, China and elsewhere will continue to challenge Tesla with an impending wave of new models, although the incentives for profitability are limited due to rising battery costs and the lack of scale. That could change in 2025-26 as more brands reach critical mass on next-gen models with proprietary software. There are a number of difficult external factors to factor in and BEV’s bold ambitions have done little to prevent crisis-level valuation multiples fueled by recession fears, rising interest rates, supply chain constraints and inflation.

The BI report also highlights that batteries are and will remain a critical factor in every automaker’s ability to remain competitive in the market for electric vehicle sales. Volkswagen has already committed tens of billions of dollars to battery development and its necessary supply chain, including plans for six 40 GWh battery factories in the EU by 2030. The German automaker has also set up three distinct strategic partnerships to pursue the development of its batteries.

Volkswagen’s foresight to invest heavily in electric vehicle battery technology is another reason Bloomberg Intelligence thinks the automaker is set to overtake Tesla in BEV sales. According to the report, Chinese automaker BYD is on track to rank third in electric vehicle sales by 2025, followed by a saturated pack of legacy automakers all circling around 1 million in annual sales.

With BYD, Chinese automakers like NIO and XPeng are closing the technology and brand gap overseas, paving the way for a serious showdown in China against Volkswagen, BMW and Tesla. China’s growing BEV sales mix is ​​dominating all global markets – getting a big chunk of it could prove key for any automaker looking to dethrone Tesla in EV sales.

These Bloomberg Intelligence predictions are just that, but the full report provides the data used to make its predictions. We recommend that you check for yourself. Tesla will be hard to catch at the rate it is currently moving, but we can all keep an eye on the EV sales market to see if Volkswagen is actually picking up the slack as expected. Place your bets now.

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