Thomas Schaeffer, chief executive of the VW brand, said Europe, with Germany in particular lagging behind in the race to a clean energy economy, is “rapidly losing competitiveness”.
The CEO of VW emphasized clean energy initiatives
According to VW Schafer, “Europe lacks cost competitiveness in many areas” due to high energy costs and limited supply chains.
Energy prices hit record highs in Germany in August 2022 after the Ukraine war sent shockwaves through the gas and oil industry. Germany was one of the hardest hit, with the highest dependence on Russian gas among EU members.
The supply chain disruptions caused by the pandemic are compounded by the war, which drives material and energy costs high. Volkswagen had to reduce energy consumption while implementing other cost-saving measures to compensate.
With new leader Oliver Blume, Volkswagen has cut ties with several projects, including a 1.9 billion euro loss on its investment in self-driving startup Argo.
Despite its best efforts, the brand’s CEO said that VW was stuck on the brink of bankruptcy. Shaffer wrote in a LinkedIn post:
The reality is that Germany and the European Union are rapidly losing their attractiveness and competitiveness globally. America, Canada, China, Southeast Asia and regions like North Africa are moving forward. We are treading water. I am very concerned about the current developments regarding investments in the transformation of the industry.
The transition to a clean energy economy “must be an urgent priority” and unless energy prices can be reduced, “investments in energy-intensive production or new battery cell factories” will be almost impossible.
Shaffer added the example of the Depreciation Act, which was designed to lower energy prices in the US and establish clean energy through greater incentives and investments.
The IRA bill has raised more than $40 billion since its passage in August on investments to ensure an adequate domestic supply of critical EV materials and support a sustainable transportation industry.
Volkswagen’s CEO said “new strategic tools” should focus on long-term technology development rather than short-term crossovers.
Germany plans to generate 100% of its electricity needs from clean energy sources by 2035, and government guarantees for renewable investments have been announced.
German Economy Minister Robert Habeck spoke at a meeting with renewable energy representatives last week.
It might make sense for the state to step in and say ‘you can order before approval comes in’, then the expansion of the industry would be equally rapid.
He also spoke of supporting the transition to clean energy by adding “wind turbines or solar panels” to local production, which does not have to be transported halfway around the world.
According to Schaefer, CEO of the VW brand, the company is ready to play its part in strengthening Europe’s industrial and technological powerhouse.
Do you agree with the CEO of the VW brand? Does the EU need to do more to accelerate the clean energy transition? Or is VW looking for new incentives in its home country (like new subsidies, perhaps)? Let us know your thoughts in the comments.
FTC: We use automated links that generate revenue. More.