Volkswagen accelerates EV push

The electric-vehicle push is on at Volkswagen and there’s no turning back now.

One of the world’s Big Three carmakers today announced it would push forward with plans to launch 70 new electric cars by 2028, or over the next decade.

While it took a hit on the profit margin of its namesake brand, the Volkswagen Group’s headline at today’s annual financial conference was that it was punching up its original promise of 50 new electric cars by 2025.

The Volkswagen Group’s CEO, Dr Herbert Diess, insisted that the share of EVs in the Group’s new-car fleet will be around 40 percent by 2030, up from earlier forecasts of 25 percent by 2025, adding up to 22 million EVs over the next decade.

It has already shown four ID-branded electric cars that are heading for production – the ID hatch, the ID Crozz SUV, the ID Buzz van, the ID Vizzion – plus it showed the ID Buggy at last week’s Geneva motor show. It also has a small squadron of EVs in China and confirmed a budget EV crossover for Europe as well.

In addition, confirmed EVs from Porsche and Audi are on their way, plus Seat and Skoda have also confirmed their own cars.

European environmental advocacy concern Transport and Environment added credibility to Volkswagen’s push today, calling the move a “breakthrough” in the legacy car industry.

Transport and Environment has been one of Volkswagen’s greatest adversary’s during the Dieselgate crisis, and has even lobbied for German courts to ban diesel power in cities that exceeded World Health Organisation safe limits for airborne NOx.

"This is the first credible climate plan by a major automaker," its executive director, William Todts, insisted.

CEO Dr Herbert Diess went further, though, insisting the Volkswagen Group was prepare to build EVs off its Modular Electric Matrix (MEB) architecture for other car companies, including its rivals.

That’s a big step forward from earlier statements from Volkswagen, which insisted only that it was prepared to allow other car companies to use MEB to shortcut their own EV development.

Dr Diess insisted the move made sense because the MEB shift only made sense at scale, and the more volume that came off the platform, the easier it would be to make it profitable.

Significantly, the Volkswagen Group’s three other EV platforms (the C-BEV that sits beneath the just-launched Audi e-tron, the Porsche-developed J1 that will first appear beneath the Taycan and the Audi e-tron GT, and the PPE that will be the future of EV for all the premium brands) have not been offered up for open-source use.

Volkswagen is planning to build at least one major battery-cell manufacturing plant on continental Europe to meet the demand MEB will bring. It already has cell-production contracts in place with South Korean firms LG Chem, SKI and Samsung, while CATL provides it with cells in China – as it does for BMW.

Volkswagen has also established a new software-development arm, with Dr Diess admitting: “Software will account for half of our development costs” by 2030.
“There is no alternative to electric mobility,” Dr Diess said, dismissing synthetic fuels and fuel cells (in the short-term) because they “only serve to delay” a zero-emission future.

Instead, the Group plans to leave Audi to develop fuel cells while it focuses on battery-powered electric cars.

"The fuel cell is coming,” Audi boss Bram Schot said, “and we want to be there when this market picks up".

The first company to sign on for the MEB architecture was German mobility startup e.Go, in a deal announced at last week’s Geneva motor show.

Ford is an obvious candidate, because it already has technical tie-ins with Volkswagen for commercial vans in Europe and pickups in the US, and lacks visible strength in EV technology.

Yet Volkswagen insisted it was holding the door open for any EV maker to use MEB and its battery and electric motor technology for a license fee, even if they compete against Volkswagen’s own ID-badged EV models or those of Seat or Skoda.

It would not just be the architectures, though, but the battery cells, the power electronics and the electric motors, as well as the mechanical components.

“We’ve had a few more requests about licensing MEB,” Dr Diess said.

“We’re strong in China, so you can imagine, and licensing MEB would open it up for smaller manufacturers to become relevant.

“Ford is one of our rivals in Europe so if Ford is to use our platform, then we would be prepared to help there.”

“Manufacturing is to be considered, let’s say,” Diess admitted. “I wouldn’t say we would invest in a plant specifically, but if we have spare capacity, and it makes economic sense, it (contract manufacturing) is an option.”

The move comes as Dr Diess tries to take the Volkswagen Group CO2 neutral by 2050, with steps including setting up a carbon-offset fund with €50 million in seed money and foregoing the corporate jet for commercial travel more frequently.

The Volkswagen Group alone accounts for one percent of the world’s CO2 emissions, Dr Diess admitted.

“We aim to reduce this to zero. That is our goal and our contribution to climate protection,” he said.

Volkswagen is aiming to reduce the net emissions from its factories and supply chains to zero in what Dr Diess insists is the "most ambitious and comprehensive program of climate impact reduction ever undertaken in the automotive industry".

Curiously, the term “CO2” appeared 61 times in the Volkswagen Group’s annual report, while rival PSA (the parent of Peugeot, Citroen and DS) didn’t use it in its report even once.

There are complications to the plan to build cars for competitors, though.

Existing deals mean it can’t compete with its own suppliers, so any parts supplied to the rival companies would have to come directly off Volkswagen’s shelves, rather than being custom-developed, helping its own economies of scale and purchasing power.

While it seems magnanimous, it would place Volkswagen in a position of tremendous power in the EV world, giving it effective control of the engineering and development of an even bigger slice of the world’s EV market.

There will also be a massive impact on employment levels at Germany’s biggest employer; a fact not lost on Volkswagen’s unions.

“We need a frank and open debate about the consequences (of electric cars),” Dr Diess insisted. “That means we will need to make job cuts and achieving this purely through fluctuation and early retirement will be difficult.”