Key Takeaways
- Volkswagen is diverting billions from EV plans to keep gas engines competitive.
- One-third of $193.5 billion earmarked for electrification efforts will be used to keep its combustion engines competitive.
- Other automakers, like Mercedes-Benz, GM, Kia, and Land Rover, have also adjusted their EV strategies.
Once determined to topple Tesla as the preeminent maker of electric vehicles, Volkswagen is backtracking on its EV ambitions. Executives have confirmed the brand will funnel billions formerly earmarked for electrification into keeping its gas- and diesel-powered engines competitive, reports Automotive News Europe.
Speaking at a recent Reuters event in Munich, Germany, Volkswagen Group CFO and COO Arno Antlitz announced that the automaker will continue investing in combustion engines despite its move to electric cars. Previously, the automotive giant had plans to pour €180 billion ($193.5 billion) into electrification and digitalization efforts. Instead, two-thirds will be used for electrification and digitalization efforts, with the rest for ICE development.
2024 Volkswagen ID.4
- Base MSRP
- $39,735
- Horsepower
- 201 hp (RWD Base) | 282 hp (RWD 82 kWh) | 335 hp (AWD)
- Torque
- 229 lb-ft (RWD Base) | 402 lb-ft (RWD 82 kWh)
- 0-60 MPH
- 7.3 seconds (base) | 4.9 seconds (AWD)
- Top Speed
- 112 mph
Not The First Automaker To Rethink Its Electrification Strategy
One-third of the capital will “still be allocated to keeping our combustion cars competitive,” said Antlitz. “The future is electric, but the past is not over.” However, it seems the automaker will not invest more than announced. “It is a third, and it will stay a third,” he added. Volkswagen is not the only brand that has reached this conclusion in recent months. Mercedes-Benz has also had to rethink its electrification efforts and will no longer go all-electric by 2030, where markets allow. Instead, it will offer a mix of hybrids and PHEVs to broaden its appeal.
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General Motors also had lofty EV goals but has had to readjust them to suit market needs. As a result, the Detroit-based marque is developing plug-in hybrids to meet demand, with the first PHEVs due in 2027. Land Rover and Kia have also made similar adjustments to their EV roadmaps. Despite this change in strategy, Volkswagen is still betting on electric vehicles. There are plans to introduce a small, affordable electric car priced at around $22,000.
Plug-In Hybrids On The Way
Volkswagen and Renault were exploring a potential partnership to co-develop a small EV, but they split earlier this year. Working together would have reduced costs further and given both brands a tool to fight the scourge of cheap Chinese imports. The automaker has also admitted that it needs to drum up more PHEV sales. When VW USA announced the delay of the ID.7 in America, the automaker hinted at the introduction of plug-in hybrids in the US.
Volkswagen Wants To Say Goodbye To Combustion With Hardcore Golf R
Volkswagen has already said the R division is going electric, just like the Golf. But until, Wolfsburg will milk the EA888 engine for all its worth.
Whether this affects Volkswagen’s plans for its battery factories remains to be seen. The company expects the first factory to be functional by 2025, but the facility may take some time to operate at maximum capacity. The automaker may slow battery production down for the first few years in response to slowed EV sales. While the ID.7 has been delayed for the United States, VW still offers the ID.4 locally, and has plans to introduce the ID. Buzz later this year.
Source:
Automotive News Europe
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