Colin-on-Cars – Ambitious electric plans from Volkswagen

All Volkswagen Group vehicles should be 100% zero-emission by 2050 as the company transforms itself into a software-driven mobility company with a strong focus on its brands and global technology platforms, providing synergies and scale as well as opening up new profit pools.

“We set ourselves a strategic target to become global market leader in electric vehicles – and we are well on track. Now we are setting new parameters,” said CEO Herbert Diess during the presentation of NEW AUTO, the Group’s strategy through 2030.

“Based on software, the next much more radical change is the transition towards much safer, smarter and finally autonomous cars. That means for us: Technology, speed and scale will matter more than today. The future of cars will be bright!”

By 2030, the Group plans to reduce its carbon footprint per car by 30% over its lifecycle (vs 2018), in line with the Paris Agreement. In the same timeframe, the share of battery-electric vehicles is expected to rise to 50%, while in 2040, nearly 100% of all new Group vehicles in major markets should be zero- emission.

Profit and revenue pools are expected to shift gradually from internal combustion engine cars (ICs) to battery-electric vehicles (BEs) and then to software and services, boosted by autonomous driving. The ICE market is set to decline by more than 20% over the next 10 years.

In parallel, BEVs are projected to grow rapidly and overtake ICEs as a leading technology. At an estimated €1,2-trillion, by 2030, software enabled sales could add around one third on top of the expected BEV and ICE sales, more than doubling the overall mobility market from around €2-trillion today to a projected €5-trillion.

Individual mobility, based on cars, is expected to still account for 85% of the market and Volkswagen’s business.

“We intend to install industry leading platforms across strong brands, to be able to have more scale and capture even more synergies in the future”, CFO Arno Antlitz said. “We will scale our BEV- platforms, we want to develop a leading automotive software stack.

“And we will continue to invest in autonomous driving and mobility services. During this transition, our robust ICE business will help to generate the profits and cash flows to do so.”

Volkswagen is also committed to reducing material costs by another 7% and is optimising its ICE business with fewer models, a reduced ICE drivetrain portfolio and a better price mix.

The comprehensive approach across four key technology platforms is meant to allow Volkswagen Group to generate synergies for all passenger and light commercial vehicle brands as well and can also be partially leveraged for trucks. Synergies are expected to arise in many areas: from a universal BEV product architecture to CARIAD’s global software platform, own cell and battery production at scale, all the way to a mobility platform that bundles a range of services seamlessly.

The SSP (Scalable Systems Platform) as Volkswagen Group’s next generation mechatronics platform will significantly reduce complexity over time and will extend the consolidation from three ICE-platforms to two BEV-platforms, to finally one unified architecture for the whole product portfolio. From 2026 onwards, the Group plans to start the production of pure electric vehicles on the SSP.

Markus Duesmann, CEO of Audi, said: “Introducing the SSP means leveraging our strengths in platform management and building on our capabilities to maximize synergies across segments and brands. In  the long run, our SSP will significantly reduce complexity in mechatronics. It particularly is the enabler to manage future challenges in vehicle development, as cars become more and more software-oriented.”

Volkswagen Group’s automotive software company CARIAD plans to develop the leading software platform by 2025, as one software backbone for all group cars.

“Software plays the decisive role in the transformation from a pure car company to an integrated mobility group. By 2030, software – on the basis of automated driving – can become a major source of income in our industry”, said CARIAD CEO Dirk Hilgenberg. The new unified 2.0 software platform for on-board connectivity and software to be rolled out throughout

Volkswagen also plans to establish a controlled battery supply chain and is introducing one unified battery cell format with up to 50% cost reduction and up to 80% use cases by 2030. Six giga factories in Europe with a total production capacity of 240 GWh by 2030 will help to secure battery supply.

By 2030, Volkswagen Group will also have systems capabilities for autonomous shuttle fleets, owning some of them and expanding its offerings of mobility services and financing. Mobility as a service and transport as a service, fully autonomous, will be an integral part of NEW AUTO.

Volkswagen Group is already involved in a self-driving system for autonomous shuttles with its strategic partner ARGO AI. CARIAD will develop level four automated driving capabilities for passenger vehicles. The Group could thus create the biggest neuronal network of vehicles on the streets worldwide.

With pilot projects in Munich, Volkswagen Group is currently testing the first autonomous buses and is planning to roll out similar projects in other cities in Germany, China and the US.

Christian Senger, CTO of Volkswagen Commercial Vehicles, said: “By the end of the decade, automated driving will completely change the world of mobility. Together with ARGO AI, we are developing an industry leading self-driving system which will enable us to offer completely new mobility services and autonomous transport services. Volkswagen Group is aiming for a significant market share and additional revenue streams in this important future business.”

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