Elon Musk is pictured at the opening of Tesla’s plant in Germany.
Germany’s automakers have announced bold plans in the past few years to shift to electric cars and challenge Tesla’s dominance. Instead, they are only falling further behind.
Tesla delivered 889,015 cars in the first half of this year, more than the combined EV sales of Volkswagen Group, BMW, Mercedes-Benz and Porsche.
The German automakers are struggling as software issues delay key models and contribute to waning sales in China, their biggest market, where Tesla and local champion BYD have raced ahead.
They are even lagging in their home market, where Tesla remains the top EV brand.
Investors will hear from three of the German companies this week, with Porsche reporting quarterly earnings Wednesday, followed by Mercedes and VW on Thursday.
As Tesla pushes for more volume with aggressive price cuts, it’s dialing up the pressure on legacy manufacturers that are struggling to keep pace.
Tesla’s EV sales increased 30 percentage points more than VW’s in the three months that ended in June, widening its lead.
While the Germans are mired in difficult talks with unions about retooling their combustion-era production sites, Tesla plans to expand its German factory and is preparing to build a new plant in Mexico.
“Tesla is still miles ahead of the German carmakers in all the major markets,” said Matthias Schmidt, an auto analyst based near Hamburg. “They are under pressure to boost volumes to reach the kind of economies of scale needed to make EVs profitable.”
Germany’s automakers thrived in the past because they perfected the production of vehicles running on gasoline and diesel, with hundreds of high-quality local parts makers supplying them with gearboxes, fuel injectors and crankshafts. Now that the battery is taking over, their “Vorsprung durch Technik” has evaporated.