On Tuesday, Volkswagen Group revealed its new strategy for the coming decade. Under the tagline “New Auto,” VW Group CEO Herbert Diess laid out how the company plans to increase profitability and streamline its operations by introducing a single battery electric vehicle (BEV) platform across all the group’s brands.
By 2030, VW says that it will make more money selling EVs than vehicles with internal combustion engines, and it expects mobility services and software to make significant contributions to the bottomline by then.
One platform to rule them all
VW Group has been one of the most successful pioneers of using flexible architectures across multiple brands to build a diverse array of vehicles. Currently, there are four internal combustion platforms (MQB, MLB, MSB, and MMB) and one BEV platform (MEB), with a second BEV platform called PPE coming online next year. MEB is for the volume brands VW, Seat, and Skoda, and PPE will be used by Audi and Porsche (and probably Bentley).
In 2026, VW Group will introduce its Scalable Systems Platform (SSP). Diess says that SSP will scale for vehicles from 85 to 850 kW (114 to 1,140 hp)—everything from small city cars to supercars. (The recent off-loading of Bugatti to EV specialists Rimac suggests that Bugatti won’t use SSP, but we expect Lamborghini will.) VW projects that SSP will be used to build more than 40 million EVs over the platform’s life cycle, and like with MEB, the company will license the platform to other automakers.
VW Group is spending $945 million (€800 million) for a new research and development facility in Wolfsburg, Germany, to improve its platform design capabilities, part of an $86.3 billion (€73 billion) investment in R&D between now and 2025.
“Introducing the SSP means leveraging our strengths in platform management and building on our capabilities to maximize synergies across segments and brands. In the long run, our SSP will significantly reduce complexity in mechatronics,” said Audi CEO Markus Duesmann. “Thereby, it is not only a central premise to lower CAPEX, R&D, and unit costs compared to MEB and PPE and to enable the Group to reach its financial targets. It particularly is the enabler to manage future challenges in vehicle development, as cars become more and more software-oriented.”
Batteries and charging
By the end of the decade, VW plans to have six large battery factories operational in Europe, with an annual production capacity of 240 GWh. The first of these is a joint venture in Sweden with Northvolt that is due to begin producing cells in 2023.
On Monday, VW signed an agreement with the Chinese company Gotion High-Tech to make cells at a site in Salzgitter, Germany, in 2025. (VW and Gotion will also work on a unified cell design for volume production in China.) VW’s third battery plant will be in Spain, where the company plans to concentrate the manufacturing of smaller BEVs from 2025. VW says it will establish a controlled supply chain for batteries to aid in sustainability and keep costs down.
“A Volkswagen-controlled battery supply chain will enable us to have authority over the biggest cost block, offer the best and most sustainable batteries to our customers, and secure BEV success. BEVs will become mobile power banks that can be fully integrated in the energy grid through bi-directional charging. This will enable us to generate additional profits from participation in the energy market by 2030,” said Thomas Schmall, CEO of VW Group components.
On the infrastructure side of things, VW says that Electrify America will expand to 1,800 locations by 2025 and have a total of 10,000 DC fast chargers. Electrify America is reportedly looking for a $1 billion investment as part of that expansion, in addition to the $2 billion that VW is required to invest in the company as part of the dieselgate settlement. VW Group plans to install 18,000 DC fast chargers in Europe and 17,000 in China.
As we have previously reported, VW Group has big plans for developing software internally as opposed to outsourcing it to suppliers.
Originally called Car Software, the new division is now known as CARAID, and it’s currently working on three different software platforms. E3 1.1 is for MEB vehicles, and E3 1.2 will be introduced with PPE (together with a new infotainment system) in 2023. And in 2025, a new software stack called “E3 2.0″ will be used across the group’s vehicles. Diess said that by 2030, 60 percent of VW Group vehicles will use CARIAD’s software stack. VW is also building out its own automotive cloud platform with a group based in Seattle, Washington.
One aspect of E3 2.0 is support for geofenced autonomous driving. VW plans to introduce its first commercial autonomous ride-hailing mobility service in Europe in 2025, followed by the US, working with Argo AI on the autonomous driving system.