It’s sheer electric!

It was in September 2015 when Volkswagen virtually imploded with the diesel emissions scam. As news of its fudging spread like wildfire, the once invincible German automaker stood shamed, lonely and lost.

The VW of today is determined to move on even as the payouts of the emissions scandal threaten to run into billions of dollars. Last week, Matthias Muller, Chief Executive Officer, Volkswagen, presented ‘Together – Strategy 2025’ where electric mobility will be one of the growth levers in the coming years.

“Mobility as a standalone product is being redefined – in particular by customers themselves, who will call for innovative solutions to their increasingly fast-changing needs. This revolutionary change opens up tremendous opportunities. We want to harness them,” he said at the Wolfsburg presentation.

It is in this context that VW will launch an electrification initiative which is expected to be “second to none in the industry”. The focus will be intensively on battery technology which will become one of the group’s new core competencies.

According to Muller, the electrification initiative will take centre-stage in VW’s future drivetrain strategy. The combustion engine, however, remains important and will still account for around two-thirds of the new vehicles market volumes in 2030. More significantly, the balance one-third will be electrically powered.

“By then, in other words, the breakthrough for e-mobility will long be a reality. And we are determined to make e-mobility a new hallmark of VW,” said Muller. The Group intends to launch over 30 fully electric new vehicles by 2025 and hopes to be selling about two to three million pure-electric automobiles annually by that time.

This will account for a significant 25 per cent of total sales volume. “We are stepping up our efforts accordingly and will launch a multi-billion euro investment programme,” said Muller.

In addition, establishing battery technology is one of the “Group’s core competencies and the key to e-mobility”. As the CEO pointed out, it accounts for 20 to 30 per cent of value-added for fully electric vehicles. In his view, VW would need 150 gigawatt hours of 10-battery capacity by 2025 for its own e-fleet alone which would “make for a massive procurement volume”.

Simply put, the economic importance of this issue is “plain to see” and the technological expertise would be a good fit with VW. “We will examine in detail all strategic options for developing battery technology as a new core competency for the Group,” said Muller.

He also reiterated that the fact VW was now focusing so clearly on e-mobility and battery technology did not mean that it would scale down or even suspend work on developing fuel cells. “Here, too, we intend to stay on the ball and will be ready when the time is ripe,” added Muller.

He conceded that the diesel issue “gave us a thorough shakeup” and the Group would still need time to fully recover from the trauma. Despite this huge setback, it still had solid foundations on which to build as “we now move forward to shape the future”. In a way, said Muller, the crisis acted as a catalyst. “Doors have opened at VW. There is far greater readiness for change,” he declared.

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