Volkswagen: €34bn to reinvent as electric, autonomous car maker
Volkswagen SEDRIC
Volkswagen SEDRIC

Volkswagen: €34bn to reinvent as electric, autonomous car maker

The Volkswagen Group has laid out an ambitious electric vehicle and autonomous driving roadmap, with 16 locations around the world now set to produce electric vehicles (EVs) by the end of 2022.

The €34 billion programme marks a major up-scaling of the carmaker’s electric car programme, from its current three EV production locations. CEO Matthias Müller announced the investment at the Group’s annual conference in Berlin.

Volkswagen plans to have a further nine electric car plants up and running in the next two years.

Agreements have already been signed with battery manufacturers for Europe and China, comprising much of the €20 billion already committed, while securing battery capacity to meet demand. A supplier for North America is expected to follow soon.

The turbocharged plan follows the launch of Volkswagen’s Roadmap E strategy last autumn, in which the carmaker announced its intention to produce up to three million electric vehicles annually by 2025, and market 80 new electric models across the Volkswagen Group.

The company is set to launch three new fully electric cars and six hybrids this year, with this expected to increase to a new electric vehicle “virtually every month” in 2019, Müller announced.

Evolution or revolution?

This seems to be a watershed moment in Volkswagen’s history, and that of the car sector as a whole. Even within Volkswagen itself, the move will have far-reaching repercussions, as it owns Audi, Porsche, Bentley, and Lamborghini, among other famous marques.

As electric cars become more affordable and capable, overcoming the challenges of range and charging times, the industry’s giants are keen to keep their place in the vanguard of automotive innovation, fending off challengers such as Tesla, Uber, and Alphabet.

However, this doesn’t mean that Volkswagen thinks the combustion engine is dead. Müller said:

We are making massive investments in the mobility of tomorrow, but without neglecting current technologies and vehicles that will continue to play an important role for decades to come. We are putting almost €20 billion into our conventional vehicle and drive portfolio in 2018, with a total of more than €90 billion scheduled over the next five years.

The digitised cars of tomorrow

The increased focus on electric vehicles goes hand-in-hand with the Group’s wider digital transformation. Last autumn it announced the Volkswagen I.D. – a range of electric, fully-autonomous concept cars that embody its strategic vision for the space.

Now, the carmaker’s first level 5 (complete automation) concept car has been announced: SEDRIC. It forgoes a steering wheel, pedals, and even a cockpit, in favour of four inward-facing seats. (God forbid it encounters any speed bumps.)

Taken together, e-mobility, autonomous driving, networking of all road users, and new mobility services add up to a total of €34 billion in new Volkswagen investment by 2022.

“We want to redefine urban mobility, and to that end we are systematically focusing on people and their needs, and not primarily on technology,” said Müller.

One example is Volkwagen’s recent announcement of CarLa, an autonomous robot that charges your car. It is aimed at tackling one of the friction points of electric car ownership: the need for regular charging.

Summing up, Müller said:

In spite of all the challenges, particularly those we are facing in cities, we want to be part of the solution. I am convinced that the Volkswagen Group with its 12 brands is better placed to achieve that than any other mobility group.

“And because – irrespective of all the love of cars that makes us who we are and defines our success – we have understood that, ultimately, technology is always only a means to an end.”

Internet of Business says

This final note on consumer needs is an important one. In the constant drive for technology gains, it’s vital to remember the customer. Whether passengers are travelling in a diesel car or an electric one, and whether it boasts level 5 autonomy or a humble steering wheel, it all boils down to their experience. Ultimately, it’s about whether the vehicle matches their lifestyle – and gets them to where they want to go.

In the aftermath of Dieselgate, Volkswagen is eager to redefine itself as a forward-thinking sustainability advocate. And as the largest carmaker in the world by some measures, Volkswagen will play a central role in the shift to smart electric vehicles.

The company’s renewed strategic emphasis on electric cars begs the question of how this will affect the current leaders in the field. Tesla may be the industry darling, but the financial might and pedigree of Volkswagen can’t be ignored.

Read more: Lamborghini teams with Vodafone on connected supercars

Read more: Hyundai tests first autonomous fuel cell cars

Read more: TomTom brings connected car services to Kia and Hyundai