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Volkswagen Group details New Auto interim strategy

Das Auto: Volkswagen Group chairman of the Board of Management Herbert Diess confirms the Atlas-sized ID.8 SUV will join the established ID portfolio.

Bigger ICE profit margins and huge investments to drive Volkswagen Group’s new plan

19 Jul 2021

VOLKSWAGEN Group has announced a new strategy to help it become the world leader of environmentally friendly vehicles, one that should see the conglomerate reduce its carbon footprint by 30 per cent (compared to 2018) and have electric vehicles account for half of its portfolio and sales by 2030.


Dubbed ‘New Auto’, the group-wide strategy extends beyond 2030 to 2050 by which time it is hoped the group will be fully carbon neutral with an interim goal of “nearly 100 per cent” of all its vehicles in major segments to be zero-emission by 2040.


With the internal combustion engine (ICE) market tipped to decline by “more than 20 per cent over the next 10 years”, the Volkswagen Group will be investing in and developing its EV platforms and technologies markedly over the coming years, committing €73 billion ($A116.8b) for ‘future technologies’ between now and 2025.


According to VW Group CFO Arno Antlitz, complementing the investment will be an increased profit margin of one to two per cent – from 7-8 per cent to 8-9 per cent – for the ICE portfolio in 2025.


“We intend to install industry leading platforms across strong brands, to be able to have more scale and capture even more synergies in the future”, he said. 


“We will scale our BEV-platforms, we want to develop a leading automotive software stack. And we will continue to invest in autonomous driving and mobility services. 


“During this transition, our robust ICE business will help to generate the profits and cash flows to do so.”


One of the key future technologies will be the development and launch of a new ‘SSP’ (Scalable Systems Platform) architecture that will eventually replace the current MQB, MSB, MLB, MEB and PPE platforms, with the first SSP-underpinned EVs expected to emerge in 2026.


Despite the PPE platform – confirmed to be underpinning the looming A6 E-Tron – not even making it to production yet, Audi CEO Markus Duesmann said he was already looking forward to launch of the SSP architecture as it would mean leveraging the Group’s “strengths in platform management and building on our capabilities to maximise synergies across segments and brands”.


“In the long run, our SSP will significantly reduce complexity in mechatronics,” he said.


“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.”


Before then, however, the current crop of MEB-based Volkswagen ID vehicles is set to gain a few new models with the ID.Buzz people-mover and van range set to emerge at some stage next year.


During his address at the announcement of New Auto, Group chairman of the Board of Management Herbert Diess revealed the current ID portfolio would be bolstered by the arrival of the ID.8, an all-electric large SUV equivalent to the North American market Atlas full-sizer (one up from the Touareg).


No other details have been revealed yet, although it is more than likely the new model will be underpinned by the MEB architecture and could possibly even be the last before SSP takes over.


The ID.8’s confirmation and eventual release takes the ID portfolio’s model count to five, each with their own ICE equivalent – ID.3 (Golf), ID.4 (Tiguan), ID.6 (Tiguan Allspace), ID.8 (Atlas) and ID.Buzz (T7).


A Passat-like sedan and wagon based on the ID.Vizzion and ID.Vizzion Space concepts are also slated for production.


To match the new underpinnings, Volkswagen is also developing and investing heavily in its battery technology, so much so it will be opening six new gigafactories across Europe, which are expected to amount to total production capacity of 240 GWh by 2030.


Matching the sole SSP, a universal battery cell format will be introduced, simultaneously delivering an “up to 50 per cent cost reduction and up to 80 per cent use cases by 2030”. 


The new battery tech and predicted boom in EV sales will naturally need to be supported by an appropriate level of charging infrastructure, which is why the Volkswagen Group has been partnering with energy providers across the world as it tries to build an “energy eco-system” around its vehicles.


By 2025, some 18,000 new high-power charging points will have installed in Europe, 17,000 in China, and 10,000 in North America, all of which happen to be the VW Group’s primary markets.


As important as the new-age hardware is ongoing software evolution, with VW Group’s in-house developer CARIAD reportedly working on a new ‘E³ 2.0’ software platform for a 2025 deadline to serve as one “software backbone” for all VW Group cars compared to the current three.


The release of E³ 2.0 will coincide with the launch of the SSP architecture with the headline feature being ‘level 4 readiness’ – the second-highest level of autonomous driving capability as defined by the Society of Automotive Engineers.


In the meantime, the ‘E³ 1.2’ premium software will be rolled out in 2023 for Porsche and Audi vehicles, enabling a variety of new functions and including new unified infotainment system as well as over-the-air updates.

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