Volkswagen Budd-e Concept
While the Volkswagen Group continues negotiations towards finalizing a settlement of its emissions cheating scandal with regulators in the United States, the embattled automaker today announced a company-wide strategy that outlines plans for the coming decade.
The new Together - Strategy 2025 replaces the previous strategy that aimed to see VW reach the top of the sales chart by 2018, a strategy that’s partially blamed for the automaker’s nefarious dealings with diesel emissions.
With Together - Strategy 2025, the focus now is to become the leader in sustainable mobility. This is to be achieved by transforming the core automotive business, rapidly establishing new mobility services, increasing efficiency and strengthening innovation and entrepreneurial spirits. Of course, increasing profitability remains an important aspect as well.
The big surprise, though, is VW’s commitment to launching more than 30 electric cars by 2025, and achieving annual sales of the zero-emission cars of between two and three million by the same date—equivalent to some 20 to 25 percent of the total unit sales expected at that time. Who will be buying them all? VW predicts around a quarter of new car buyers will seek an electric car by 2025.
Audi e-tron Quattro concept, 2015 Frankfurt Auto Show
Specific details on models weren’t revealed but already we have some clues. VW has at least one modular platform designed for smaller electric cars, which it previewed in the Budd-e concept car earlier this year. The automaker has also previously committed to an electric SUV from Audi in 2018, an electric sports car from Porsche due towards the end of decade, and an electric Phaeton from its namesake brand also due towards the end of the decade. We’ve also heard VW is looking at a second modular platform for larger electric cars and its own battery factory.
Beyond electric cars, VW said it will review and streamline its existing modular platforms to reduce complexity in development and production and increase overall efficiency. There will also be some consolidation of the automaker's various component operations which includes 26 plants across the globe.
One other crucial area outlined in the strategy was new competencies, namely in mobility services, battery production and autonomous car technology.
VW, like many other automakers, expects a significant share of revenues in the future to be derived from mobility services, such as car- and ride-sharing businesses. VW will set up a standalone division to focus on mobility services. Already it’s secured its first foothold in the mobility services segment at the end of May, when it invested in a strategic partnership with on-demand mobility company Gett.
In the area of battery technology, VW says it is examining the potential for future revenues in this area. As mentioned above, we’ve heard the automaker is considering its own battery plant similar to what Tesla Motors [NSDQ:TSLA] and fellow German automaker Daimler are doing.
Finally, in the area of autonomous cars, VW says it will fund its own research for autonomous and artificial intelligence technology with the view to licensing a competitive self-driving system to other firms by the end of the decade.
There’s still a lot more work to be done. In addition to dealing with its diesel issue, VW says more detailed strategies for each of its brands will be ironed out over the coming months. The automaker says detailed strategic programs, broken down into brands and functions and backed up with specific measures and financial targets, will be announced before the end of the year.