VW will not match Tesla price cuts for its EVs, CEO Blume says

BERLIN -- Volkswagen Group has no plans to offer discounts for its electric vehicles to counter price cuts by Tesla, CEO Oliver Blume told a German newspaper.

VW will not take part in a price war with Tesla, Blume told the Frankfurter Allgemeine Sonntagszeitung. "We have a clear pricing strategy and are focusing on reliability. We trust in the strength of our products and brands," he said.

VW wants to be a global leader in EVs but this should be achieved through profitable growth, Blume said.

In the U.S., Ford has followed Tesla's price cuts by reducing the price of the Mustang Mach-E crossover by $600 to $5,900, depending on the trim.

"The price cut is coming faster and more brutally than expected. Tesla could be aiming to push competitors out of the market," Antoine Weill, a partner at consultancy Simon-Kucher & Partners, told Automotive News Europe sister publication Automobilwoche.

Besides VW, Renault has no plans to cut prices for its EVs in response to Tesla discounting its Model Y and Model 3 cars by up to 20 percent.

"If you cut sales prices by 10 percent or more within a week's time it weighs on residual values and hurts existing customers,"Renault brand boss  Fabrice Cambolive, told Automobilwoche. "What counts for us is stability. But it's foreseeable that prices for EVs will come under scrutiny," he said.

VW Group's Porsche brand is considering increasing its vehicle prices by up to 6 percent, according to dealer sources.

"Price adjustments at the change of model year are standard industry practice," a Porsche spokesman told Automobilwoche without confirming the size of the price rises or which models would be affected.

"The prices valid for the coming model year are expected to be published in March,” the spokesman said.

Tesla's Model 3 and Model Y cars were the No. 1 and No. 2 sellers in the German market in December, amid a big push by automakers and dealers to get full-electric cars registered ahead of a change in the incentives given to battery-driven models.