Volkswagen Group is sorry about the emissions cheating it foisted on 11 million car buyers the last seven years or more. It’s so sorry in fact that it says it will introduce on average three battery electric vehicles annually for the next 10 years.
Better than bread and circuses for plug-in fans, these 30 all-new BEVs will be in addition to plug-in hybrids. For many observers, those are the standout points of what is actually “the biggest change process in the company’s history,” as the storied German automaker described sweeping changes to reposition itself through 2025.
“Volkswagen has always enriched the lives of millions of people all over the world with its brands and products. Our aspiration is to continue that success story and play a leading role in shaping auto-mobility for future generations, too,” said CEO Matthias Müller during the presentation of the new strategic direction in Wolfsburg. “This will require us – following the serious setback as a result of the diesel issue – to learn from mistakes made, rectify shortcomings and establish a corporate culture that is open, value-driven and rooted in integrity.”
The vision for how VW will reimagine itself ushered in by Müller is officially titled “Together – Strategy 2025.” It cuts costs for a leaner operation while dedicating double-digit billions toward things like mobility solutions, going ostensibly gonzo for EVs, requiring batteries amounting to “150 gigawatt-hours, a huge procurement undertaking.”
Müller ducked questions about a previously rumored battery factory the company is said to be mulling that could cost $11 billion euros, and be 2-3 times bigger than Tesla’s Gigafactory, but the EVs – including some on dedicated platforms – are coming, says Volkswagen.
“The company estimates that such vehicles could then account for around a quarter of the global passenger car market,” said the company in a statement. “The Volkswagen Group forecasts that its own BEV [battery electric vehicle] sales will be between two and three million units in 2025, equivalent to some 20 to 25 percent of the total unit sales expected at that time.”
With Volkswagen Group’s new storyline, some pundits wasted little time saying Tesla should be careful what it wishes for, as the German global giant awakens with electric vision.
Last year Tesla’s BEV sales were just below 52,000. It has projected ambitiously exploding that to 500,000 as soon as 2018, and maybe even to one million by 2020, Elon Musk has ventured to suggest.
None of this tarnishes Tesla’s popular appeal – and likely enhances it – as it anticipates its Model 3 along with over 400,000 intenders who’ve signed up for that storyline. But while Tesla stands out among the perceptibly slow-moving major automakers at the moment, Volkswagen is now also proclaiming its buildup to 2025 and beyond.
And, instead of one model in the works for the ”masses,” VW Group will have variants up and down the price ladder. Among its 12 brands, these include VW, Audi, Porsche, which we hear more of, and potentially also overseas brands Skoda, SEAT, and maybe eventually even Lamborghini, Bentley, and, could it be? Bugatti? We’ll see how it all plays out.
But that is one storyline, and you can flavor your own spin as facts converge with rhetoric.
For his part, Müller did not name Tesla as a provocateur, but rather said in his German announcement the handwriting is on the regulatory wall.
“Regulations will make conventional fuel engines more and more expensive,” he said according to Forbes, and “EV technology is bound to be getting cheaper and cheaper. When those two lines cross …”
You know the rest of the story, and in fact so does any automaker who wishes to be competitive in the rapidly changing global market.
In reality also, while Volkswagen has declared enough future battery electric product to make a General Motors electrified vehicle marketer wince, all the major automakers – even the Japanese – have plans for electrification.
Some, including upscale Germans, Hyundai/Kia, and the domestics also have teased plans but there can be a conflict of interest in announcing too much good stuff coming when a maker needs to sell goods on hand.
Just look at Nissan, now saying nothing about the next Leaf while sales whither on the vine.
But Volkswagen is in a bind, and seeks to turn over a new Leaf ostensibly faster than Nissan.
For the proud autocratic company, those pesky profit-sapping concerns after lying about TDI emissions do remain, so it announced an aggressive makeover. It has not abandoned diesels, will keep making them, but presumably plans are to come clean – really, this time – and make them emission compliant. And even if you personally don’t want one, or are someone who’s said you’ll never buy another VW, others will buy them.
Other realities VW is banking on as it plays from a position of financial strength having sold 10 million vehicles last year include talk of steering its corporate culture, thus its internal and external image are expected to change.
Thanks to profits flowing from existing gas and diesel vehicles, VW Group projects its vision will let it continue with operating return on sales of 7 to 8 percent and return on capital employed in the automotive division of more than 15 percent by 2025.
About those EVs
In the U.S., only a few vehicles are known to be coming, and several more have been at least speculated to be possible.
These include the VW BUDD-e (top photo) projected for 2020, the Audi R8 e-tron, and Q6 crossover which is intended to go against the Tesla Model X in 2018. Sports car fans are also aware of the Porsche Mission-E which is another Tesla competitor, says Porsche, built as a super sedan, and racetrack capable.
Those are all well and good for upper demographics, but do little to move the dial on the mass market.
Thus far in the U.S. Volkswagen has only one limited-market product, the converted e-Golf which this year has sold 1,225 units through June. In Europe its e-Up! is also a popular choice, but not likely to come to the U.S. because it’s so small.
To get the ball rolling, a skateboard type chassis such as is used by Tesla, Chevrolet and Opel (Bolt, Ampera-e), and Nissan and BMW is planned.
Aside from the grand plans, Volkswagen did not name dates and names for all of its future EVs. It will realistically be a work in progress because, like every other automaker, VW Group contends with supply, costs, marketing issues, and so forth.
What products it may green light, say, in 2021, may not yet be a gleam in its eye right now in 2016, as battery costs come down, technology improves, the market grows, and other things unaccounted for inevitably happen.
From the murky viewpoint of mid 2016, therefore, what may be coming can be spoken of, but only as conjecture, not actual predications.
According to Michigan-based analyst Alan Baum, reasoned projections can be made based on public statements by VW, and known product and plans.
The carmaker has also adopted its MEB platform from its high volume modular MQB platform which aside from the skateboard chassis, can also be used for plug-in hybrids or converted EVs.
One possibility is a large Audi crossover, probably to be called the Q8, and this may be either a pure EV or plug-in hybrid.
Another could be a BMW i3 competitor, an all-electric version of the A2 – though there is no gas powered A2 yet in production. This could go to production as soon as 2018.
Volkswagen has also teased its new take on its old classic with the Bulli microbus, which may be a long shot, but could be built as soon as 2017 in Puebla, Mexico.
From Porsche, in consideration is a battery electric sedan called the Pajun. This vehicle could likely be better looking and a bit smaller than the Panamera and could come in 2018 or 2019, based on the MSB rear-wheel-drive platform.
In sum, Volkswagen is looking at EVs from as small as its tiny overseas Polo to its large Phaeton luxury sedan. Baum thinks neither is likely to come to the U.S., but along with a fuel cell vehicle or two, Volkswagen’s planners are working on electric cars.
Sky’s the Limit
In response to a reporter’s question about who will be in charge of ensuring the plan is implemented, Müller did not have an answer ready.
Volkswagen’s rank and file are used to hearing clichés and rhetoric. Sometimes management means it, and plans push forward, sometimes things change.
In this case, the company has made very bullish pronouncements, so eyes will be on how reality meets those goals in coming years.
The “Strategy 2025” announced by the new CEO was also a symbolic rite of passage for him to make his mark on the heels of the last CEO Martin Winterkorn’s “Strategy 2018.” That strategy was to become the global market leader and in qualified terms it met those goals.
This too was emphasized by Müller, who knows someone better ride herd on this new initiative, even if much more has yet to be disclosed.