Volkswagen to spend billions on pivoting to electric

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Volkswagen (VW) is hoping to enter the electric car market and rival Tesla by investing more than 24 billion US dollars in the development of zero-emission vehicles by 2030.

The world’s largest automaker by sales said on Monday it would increase its new electric cars from 30 to 80 models across its multi-brand group by 2025, and have an electric version of each of its 300 group models by 2030.

Challenges and opportunities

The German company had previously said it would spend more than 12 billion US dollars by 2025 on a move to electric vehicles. VW had been slow to embrace electric cars and self-driving technology – until it admitted two years ago to cheating on US diesel emissions tests, prompting a major strategic shift.

Volkswagen CEO Matthias Mueller at the opening of the Frankfurt Motor Show (IAA) in Frankfurt. / Reuters Photo

Major advances in batteries and a global fight against pollution in the wake of VW’s scandal have raised pressure on carmakers to speed up development of zero-emission alternatives.

“We are setting the scene for the final breakthrough for e-mobility,” Chief Executive Matthias Mueller said on the eve of the Frankfurt auto show as he unveiled the group’s “roadmap E.”

VW’s electric car offensive mirrors the pre-Frankfurt show announcements by German rivals: Daimler said on Monday its Mercedes-Benz luxury brand planned to offer electric motors for all models by 2022, though cautioned the shift to lower-margin electric cars required extra cost savings.

BMW, which launched the i3 electric car in 2013, said on Thursday it was readying its factories to mass produce electric vehicles by 2020 and pledged to have 12 purely battery-powered models on offer by 2025.

Roadmap E

Growing restrictions and charges for diesel and gasoline vehicles are spurring the rise of electric cars, although analysts say big investments in charging points and power networks will be needed to serve a mass market.

VW Photo

China, the world’s biggest automotive market, is studying when to stop the production and sale of combustion engine vehicles, echoing moves by Britain and France, which have announced bans for conventional cars from 2040.

To cover the needs of “roadmap E”, VW has started a tendering process for the selection of partners in China, Europe and North America to provide battery cells and related technology worth more than 60 billion US dollars.

VW said it would require capacity equivalent to at least four giga-factories to power the vastly increased fleet of electric cars.

VW’s electric car program will center on the new MEB modular platform developed by its namesake brand, which will underpin all mass-market electric vehicles from across the group. A Golf-style compact model with about 600 kilometers of driving range is due to be built in 2020.

Source(s): Reuters