Tesla’s decision to slash EV prices sent shockwaves through the industry, but Volkswagen isn’t about to crumble and follow suit. That’s according to CEO Oliver Blume who has ruled out any price cuts for its ID-badged cars and crossovers.
Earlier this week Ford responded to Tesla’s decisions to chop up to $13,000 from the price of its Model 3 and Model Y cars by reducing the price of the Mustang Mach-E by between $600 and $5,900. But speaking to reporters from Germany’s Frankfurter Allgemeine, VW’s boss said the company’s pricing structure would hold firm.
“We have a clear price strategy and rely on reliability,” Blume told the newspaper. “We trust in the strength of our products and brands.” He said he believed any brand that changed prices up and down would lose credibility and expressed concern that VW could end up trapped in a downward price spiral that eroded its profit if it followed its rivals’ lead.
Blume said he wanted Volkswagen to be a leading global player in electric cars and software, but not at any price to the company. “For me, our ambitions are about meaning and added value, about profitable growth,” he told reporters.
Related: Ford Slashes Mach-E Prices By Up To $5,900 In Response To Tesla
Blume replaced former VW CEO Herbert Diess last summer, while also continuing in his position as CEO of Porsche. In the interview Blume criticises Diess’s attempts to turn VW “into a tech company,” and also the former boss’s unrealistic timeframe for the development of a new cross-brand operating system. Delays in developing the software forced the VW Group to delay key products, including the massively important Porsche Macan EV.
Both Ford and Volkswagen lag far behind Tesla in terms of the number of EVs sold, but Ford plans to dramatically increase production of its Mustang Mach-E to close the gap, and Volkswagen is preparing to launch the ID.7, its own rival to the Tesla Model 3, which it showed in disguised form at this month’s CES in Las Vegas.