Heading
Close X
Menu
21 Jul 2023
Meet the NEW AUTO strategy through 2030! One of the world's top automakers, the Volkswagen Group, has revealed a comprehensive plan to become a software-driven mobility corporation with a focus on electric cars (EVs) and cutting-edge technological platforms. The company, which operates under the slogan "NEW AUTO," aspires to become the market leader for electric vehicles while placing a high value on sustainability and carbon reduction.
The Volkswagen Group is refocusing its efforts to take advantage of the potential presented by the electric and digital mobility future, with sustainability and decarbonisation playing a key role in its new approach:
2030 - The Group aims to lower the carbon footprint of each automobile during its lifetime by 30% by 2030 (compared to 2018), and battery-electric vehicle adoption is anticipated to reach 50%.
2040 - Virtually every new Group vehicle in the major markets should be zero-emission vehicles.
2050 - The Group wants to run completely climate-neutral operations.
“We set ourselves a strategic target to become (the) global market leader in electric vehicles – and we are well on track. Now we are setting new parameters,” the Group's strategy through 2030, CEO Herbert Diess, declared during the announcement of NEW AUTO. VW has made significant progress in this area with its dedicated electric platform called the Modular Electric Drive Matrix (MEB).
With the help of autonomous driving, Volkswagen maintains that profit and revenue pools are anticipated to gradually transfer from internal combustion engine (ICE) cars to battery-electric vehicles (BEVs) and subsequently to software and services. It follows that over the following ten years, the ICE market will experience a fall of more than 20%.
Let’s expand on Volkswagen's strategy and its key initiatives for the future below.
The Volkswagen Group has announced that it has grandiose intentions to increase the number of electric vehicles (EVs) in its range and move towards sustainable transportation. Volkswagen presented its strategy for transforming the Group into a software-driven mobility company with a strong focus on its potent brands and global technology platforms, providing synergies and scale plus opening up new profit margins, ready to unleash value in the battery-electric autonomous mobility world.
CEO Herbert Diess outlined the company's vision, highlighting the strategic goal of becoming the global market leader in electric vehicles. The next phase of transformation revolves around the transition to safer, smarter, and eventually autonomous cars. Diess emphasised the importance of technology, speed, and scale in this transformation and expressed confidence in a bright future for the automotive industry.
In alignment with the Paris Agreement, Volkswagen Group aims to reduce its carbon footprint per car by 30% by 2030 compared to 2018 levels. The company plans to achieve a 50% share of battery-electric vehicles (BEVs) in its lineup by 2030, with nearly 100% of new vehicles being zero-emission by 2040. Ultimately, the Group aims to operate fully climate-neutral by 2050.
Volkswagen anticipates a gradual shift in profit and revenue pools from internal combustion engine (ICE) cars to BEVs and, ultimately, to software and services enabled by autonomous driving. The ICE market is expected to decline by 20%, while BEVs are expected to surpass ICEs as the leading technology.
To finance the transition to BEVs, Volkswagen aims to maintain a robust-margin ICE business, generating strong cash flows. The company plans to improve BEV margins through disciplined ramp-up, leveraging synergies, lower battery costs, and increased scale. Volkswagen Group has set an ambitious target of achieving margin parity within the next two to three years. Furthermore, the company plans to develop a leading automotive software stack, invest in autonomous driving, and expand mobility services.
Volkswagen Group aims to create unparalleled synergies by implementing four key technology platforms, enabling efficient scaling across all passenger and light commercial vehicle brands. These platforms encompass a universal BEV product architecture, CARIAD's global software platform, in-house cell and battery production, as well as a comprehensive mobility platform bundling various services.
Recognising the importance of battery technology, charging infrastructure, and energy services, Volkswagen Group plans to establish a controlled battery supply chain through strategic partnerships and end-to-end involvement in the battery value chain. The company aims to reduce complexity by introducing a unified battery cell format, aiming for a 50% cost reduction and up to 80% use cases by 2030. With six giga factories in Europe, the Group plans to secure a battery supply of 240 GWh by 2030.
Volkswagen Group has partnered with ARGO AI to spearhead the development of a self-driving system specifically designed for autonomous shuttles. Additionally, its subsidiary CARIAD focuses on advancing level 4 automated driving capabilities for passenger vehicles. With these initiatives, Volkswagen is poised to establish an extensive neuronal network of vehicles reshaping the future of transportation.
Volkswagen Group is currently conducting pilot projects in Munich, testing the capabilities of autonomous buses. Building on the success of these initiatives, the company plans to expand similar projects to other cities in Germany, China, and the United States. By 2025, Volkswagen aims to launch its first autonomous mobility service in Europe, followed closely by the U.S. market. The projected growth in the mobility-as-a-service sector is highly promising, with estimates suggesting a $70 billion market in the five largest European markets alone by 2030.
In the forthcoming years, Volkswagen intends to consolidate all its mobility offerings under a single platform. This approach will enable the company to capture a significant market share and generate additional revenue streams. By providing a diverse range of services, including rentals, subscriptions, sharing, and ride-hailing, Volkswagen ensures high availability, occupancy rates, and profitability. This integrated approach is aimed at maximising customer convenience and operational efficiency.
Volkswagen Group's strategic focus is centred on Europe, China, and the United States. Leveraging its established market leadership and high profitability in China, the company is rapidly expanding its electric vehicle (EV) product portfolio, including models such as the ID.4, ID.6, and upcoming ID.3. Volkswagen, along with its partners, is establishing a strong local presence through its NEV joint venture Volkswagen Anhui, which serves as a hub for the development of its Scalable Systems Platform (SSP).
In the U.S., the Biden administration's commitment to electrification presents an opportune moment for Volkswagen to increase its market share. The company has already invested in building an extensive charging infrastructure and offers a range of appealing EVs tailored to the American market.
Recognising the evolving landscape, Volkswagen Group is implementing a comprehensive transformation program over the next decade. With around half of its 660,000 employees currently engaged in traditional car production, the company is committed to responsibly guiding its workforce through this transition.
Through collaboration with the works council, Volkswagen is providing resources for re-skilling and acquiring software-based capabilities. German sites have already been transformed to accommodate future needs, with the Zwickau plant serving as an e-mobility hub, and similar transformations planned for the Emden and Hanover facilities.
Yes, the CEO of Volkswagen has formally announced that 10 new electric cars would be introduced by the brand by 2026.
Volkswagen has already set its NEW AUTO in motion. The automotive behemoth has revealed its comprehensive blueprint to reshape itself as a software-driven mobility corporation with a focus on electric cars (EVs) and cutting-edge technological platforms.
Yes! According to the exhaustive BEV forecast research, several legacy automakers will experience sales declines through 2025, but Volkswagen is on course to surpass Tesla's manufacturing volume by 2024.
Volkswagen Group's ambitious vision for autonomous mobility solutions and its commitment to transforming the future of transportation highlight its determination to be at the forefront of the industry. By harnessing cutting-edge technology and creating a unified platform, the company aims to capture a significant market share, provide unparalleled convenience to customers, and generate additional revenue streams. With a strategic focus on Europe, China, and the U.S., Volkswagen is well-positioned to capitalise on the growing demand for electric and autonomous vehicles.
Click here to read more about Volkswagen’s NEW AUTO.
Alternatively, click here to learn more about the latest VW models for sale at CFAO Motors VW.