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Volkswagen is fully committed to the electric vehicle market. Today, the German automaker revealed plans to launch over 30 new electric models by 2025, aiming to sell between two to three million electric vehicles (EVs) annually by that time. In other words, VW intends for a quarter of its sales to consist of electric vehicles within the next decade.
This significant transition to electric vehicles, alongside increased investment in autonomous technologies, artificial intelligence, and alternative transportation models beyond traditional car ownership, forms the basis of Volkswagen’s new “TOGETHER – Strategy 2025.” This strategy represents one of the most substantial shifts in the company’s history. Improving profitability is also a major focus, with VW seeking to enhance its profit margin from around 6 percent in 2015 to 7–8 percent by 2025.
“Volkswagen has always enriched the lives of millions globally through its brands and products. Our goal is to continue this success and play a pivotal role in shaping the future of mobility,” stated CEO Matthias Müller during an announcement in Wolfsburg. “This requires us—after the serious setback from the diesel scandal—to learn from past mistakes, address deficiencies, and cultivate a corporate culture founded on openness, values, and integrity.”
In addition to electric vehicles, Volkswagen is set to make “mobility services” a central element of its business by 2025. The automaker plans to establish a new cross-brand division focused on creating innovative transportation solutions. The first project of this division will be to enhance ride-hailing services, like its recent investment in Gett, and will eventually expand into car-sharing, robot taxis, and other as-yet-undetermined transport options.
Overall, Volkswagen anticipates that its investment in Strategy 2025 will reach “the double-digit billion range.” The automaker has not clarified whether this figure is in euros or dollars; however, the distinction is likely inconsequential at this stage.
How will VW, which is still recovering from the financial burdens of the Dieselgate scandal, afford this ambitious technological leap in under a decade? Unfortunately, the situation doesn’t look promising. Volkswagen suggests that it will finance this transition through improved efficiencies. This term often implies a lack of concrete financial strategy. Nevertheless, Müller’s comments indicate that eliminating inefficiencies might mean streamlining the extensive range of models across the company’s diverse brand portfolio. While the development of electric vehicles is a priority, funding for research and development could face cuts, potentially jeopardizing future high-performance gasoline models within VW’s brands.
Volkswagen plans to provide more details about its strategy, including insights into individual brands, in the coming months, with a detailed plan expected by the end of 2016.
One thing is clear: Should VW successfully implement its 10-year plan, Germany’s goal of phasing out new gasoline-powered vehicles by 2030 will become significantly more achievable.
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