Volkswagen to launch over 30 electric cars in the next 10 years

2016-06-28 15:55:44

The Wolfsburg based giant automaker, plans to divert much of its investments into developing and making future electric vehicles under its companies, the Volkswagen Group. This is according to the automaker’s chief executive, Matthius Mueller. This is set to make Volkswagen’s electric cars account for 20-25% of its annual car sales, worldwide.

Currently, the giant automaker is experiencing a fall in sales since the Diesel-gate scandal and the sales of its rivals is increasing day by day. The huge investments are meant to reshape VW’s business operations, making it the leader in the manufacture of greener cars by 2025. This strategy has been dubbed by VW as “TOGETHER- Strategy 2025.”

TOGETHER-Strategy 2025

This strategy is set to realign some of the businesses process of the company. It will be going down in history for integrating several components of its business operations with an efficiency drive to the future. Presently, VW boasts of employing over 67,000 workers located in over 26 countries in the globe.

First, with regards to vehicles and drivetrains, VW Group is to lay much emphasis on e-mobility. The firm announced its plans to launch over 30 purely battery powered electric vehicles in less than a decade. Already, the firm boast of Audi e-tron, which is part of the e-mobility plan. This is set to increase the company’s deliveries by 2025. In 2015, VW sold only 10 million vehicles of its luxurious vehicles such as Porsche and Audi to cheaper models such as Skoda's and Seats. It also build only 67,000 fully or partly electric cars beating Tesla’s 50,580 units.

Secondly, the company is also seeking to refurbish its services business, touching on areas such as ride hailing and car sharing capabilities. This is also set to increase the firm’s annual sales in billions of euros by 2025. In order to attain this, the firm is also set to hire another 1,000 software engineers who will develop the autonomous driving software and lithium ion batteries.

Thirdly, the firm’s CEO Matthias Mueller admitted that the strategy would require billions of euros worth of investments to put in to motion. He said that the strategy would save the firm up to 8 billion euros in savings per financial year. However in order to achieve this, the firm would have to cut its non-core businesses such as Ducati motorbikes or use of diesel engines in most machines.

Muller told The Wall Street Journal that the firm could easily hit the 2025 goals despite the impact Diesel-gate Scandal cost the company in the last few years. Currently, the firms boasts of having a number of steps into developing and testing the autonomous vehicle. It has acquired a special permit with the California DMV to test a number of its vehicles on its roads.

Effects of Diesel-gate Scandal

The German automaker plunged into crises in September 2015, after it was found that its vehicles had been fitted with a software that could interfere with distort emission tests. It was found that over 11 million units had been affected, leading to recall of these units in the long run.

The scandal cost VW billions on recall costs and legal expenses, altering its achievements over the years. In addition, it was the worst ever scandal that hit the giant automaker in over 80 years the company has been in operation. However, the company’s board is keen into redeeming its reputation from the mistakes, rectifying its shortcomings and establishing a corporate culture that will catapult the firm into profits in less than a decade.

But TOGETHER-Strategy 2025 is said to be also targeting on rebranding VW in response to the crisis. Paul Charles, UK based marketing and branding expert, said it would take up to ten years for VW to rebuild itself completely from the Diesel-gate Scandal. VW’s timing seems to be perfect with the time period to completely implement the TOGETHER-Strategy 2025.

New Target Markets

Muller also reaffirmed VW’s expansion and expansion plans, targeting new markets in North America and Asia. China is expected to be the new market for VW’s electric cars, being a growing economy for the auto industry. The company also said that talks on how to partner with the region’s auto sellers are in progress. Already, VW has over seven brands of vehicles selling in the European market. It is also the largest industrial investor in many EU countries and that why VW is striving to regain trust in the future. 

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Guest Editor