The world was changing before Covid, but the pandemic has helped shine a spotlight on many of those changes and also prompted many companies to kickstart their plans – and, although already in motion in some areas, the new Volkswagen Accelerate plan rather sums it up.
Volkswagen is accelerating its transformation into a software-driven mobility provider. By rolling out the Accelerate strategy it has just unveiled, the company will systematically prepare for the profound changes in the automotive industry in good time.
This involves accelerating the other big issues of the future: integration of software into the vehicle and the digital customer experience that will become crucial core competencies. In implementing data-based business models, the company is seeking to attract new groups of customers and tap additional sources of income.
Volkswagen also will make autonomous driving available to many people before the end of the decade.
“E-mobility was just the beginning: the real disruption has yet to come. With our strategy we will Accelerate towards the digital future,” says Ralf Brandstätter, CEO of Volkswagen. “In the coming years, we will change Volkswagen as never before.”
Back in 2016, Volkswagen kicked off its transformation and the industry’s biggest electric offensive with the TRANSFORM 2025+ strategy. With Accelerate Volkswagen now aims to transform itself into ‘the most attractive brand for sustainable mobility’.
The company is pursuing three strategic value drivers for the accelerated transformation – ‘brand value’, ‘scalable platforms’ and ‘valuable enterprise’, each of which is underpinned by specific measures and ambitious goals.
In a recent virtual conference it gave a first design preview of Project Trinity: The electrically powered sedan is to be built in Wolfsburg from 2026 and will set new standards in terms of range, charging speed and digitisation – and will be able to drive highly automated according to Level 4.
The project name Trinity is derived from the Latin ‘trinitas’ and stands for the tri-unity. Accordingly, Trinity stands for three crucial themes: a newly developed electronics platform with state-of-the-art software, the simplification of the supply structure, and fully networked and intelligent production at the main plant in Wolfsburg.
“Trinity is a sort of crystallisation point for our Accelerate strategy, a lighthouse project, our software dream car,” says Brandstätter. “The newly developed vehicle architecture will set standards in terms of range, charging speed (“charging as fast as refueling”) and digitalisation.”
In addition, Trinity will make autonomous driving in the volume segment possible for many people. By the planned start of series production in 2026, Trinity will already reach Level 2+ and be technically ready for Level 4.
“We are using our economies of scale to make autonomous driving available to many people and to build a learning neural network. In this way, we are creating the conditions for the continuous exchange of data from our vehicle fleet – for example, on the traffic situation, on obstacles or on accidents,” he says.
“Trinity thus gives people time and saves them stress. After a long highway trip, you arrive at your destination relaxed. Because you have been driven by a chauffeur to your vacation or to your home after work. Trinity therefore becomes a kind of ‘time machine’ for our customers.”
With the production of the series version, the Wolfsburg plant will become a showcase for state-of-the-art, intelligent and fully networked production processes.
“We will completely rethink the way we build cars and introduce revolutionary approaches. Digitalisation, automation and lightweight construction play an important role here.”
Future vehicle models such as Trinity will be produced with considerably fewer variants, and the hardware will be largely standardised. The cars will then have virtually everything on board and customers will be able to activate desired functions ‘on demand’ at any time via the digital ecosystem in the car. This will significantly reduce complexity in production.
By developing the automobile into a software-based product, Volkswagen is creating the conditions for new, data-based business models. Entry barriers to individual mobility are to be lowered while at the same time offering even more attractive usage packages.
Volkswagen intends to generate additional revenue in the usage phase – for charging and energy services, for software-based functions that customers can book as needed, or for automated driving.
“In the future, the individual configuration of the vehicle will no longer be determined by the hardware at the time of purchase. Instead, customers will be able to add functions on demand at any time via the digital ecosystem in the car,” says Brandstätter.
Volkswagen is spearheading the development of the customer-centric digital ecosystem, with the ID. Family blazing the trail. For this, Volkswagen has established the ID. Digital agile project unit that will provide ‘over-the-air’ updates every 12 weeks starting in summer 2021. These will enable the vehicle to remain up to date throughout its life cycle and become better and better with new functions.
A fully networked fleet of over 500 000 vehicles is expected to be on the road in just two years’ time, through which Volkswagen will be able to transmit direct customer feedback to new functions.
By turning the vehicle into a software-based product, Volkswagen is setting the scene for new, data-based business models aimed at lowering entry barriers to individual mobility while offering very attractive service packages for the customers.
Volkswagen has earmarked around 16-billion Euros for investment in the future trends of e-mobility, hybridisation and digitalisation up to 2025. To be able to finance the sizable future investments, the company will systematically work on increasing its efficiency with Accelerate. The targeted operating margin of at least 6% t is expected to be achieved by 2023 and also secured long term.
The focus here will be on becoming more resilient to fluctuations in the market. To achieve this, Volkswagen is seeking to trim its fixed costs by 5% before 2023, increase factory productivity by 5% a year, optimise material costs by 7% and bring all regions into the black in the long term. In South America and the United States, Volkswagen is striving to break even in the current fiscal year. The company can now post a profit in North America with a decrease in sales volumes of around 15% and in South America with sales volumes down by as much as 30%.
Volkswagen plans to rapidly accelerate the global e-campaign once again: by 2030, the brand will increase its market share to more than 70% of deliveries of all-electric cars in Europe – double the previous planning target of 35%. In the United States and China, the brand is targeting an EV market share of 50% in the same period.
To achieve this, Volkswagen will bring out at least one new BEV model every year. The all-wheel-drive ID.4 GTX will kick things off in the first half of 2021, followed by the sporty ID.5 in the second half of the year. The ID.6 X / Cross, a seven-seater electric SUV for the Chinese market, will be launched in autumn.
Plans for an electric car under the ID.3 – with an entry-level price starting at €20,000 – are pushed up by two years to 2025.
“Volkswagen will undergo profound changes. We will epitomise not only climate-friendly e-mobility, but especially fascinating digital customer experiences, new business models and autonomous driving for many people. We have built up a strong basis for this over the last few years. Now, with Accelerate we will give digitalisation a further push,” says Brandstätter.