The Volkswagen brand VOWG_p.DE will only produce electric vehicles in Europe from 2033, CEO Thomas Schaefer said on Wednesday (Oct. 26), committing to an earlier date than its previous 2033-2035 target, according to Nasdaq.
VW halt ICE Vehicles Production by 2035
Skoda CEO Klaus Zellmer stated that as far as Europe is concerned, VW will be halting production of ICE vehicles by 2035 and aims for 70% EV sales by 2030.
“In Europe, we will exit the business with internal combustion vehicles between 2033 and 2035, in the United States and China somewhat later,” Zellmer said.
“In South America and Africa, it will take a good deal longer due to the fact that the political and infrastructure framework conditions are still missing. VW plans to make its entire lineup CO2-neutral by 2050 at the latest,” he added.
In addition, Schaefer stated in the coming decade that the VW brand would reduce the number of models on offer and raise the profit margin for all volume brands – Volkswagen, Skoda, SEAT, and commercial vehicles to 8% by 2025.
His comments reiterate other senior management figures at the German automaker who also rolled out plans to streamline production and improve productivity as it competes to rule the EV market.
Premium brands such as Audi and Porsche boosted the company’s results in the first half of the year, with Audi registering a 51% increase in operating profit and Porsche up to 22%, in contrast to an 8% decrease with the Volkswagen volume brands.
The passenger cars brand reached a 5.6% operative margin in the first half of 2022, up from 3.4% in the same period in 2021.
Bringing vehicles from the volume brands to the same factory saves costs. Schaefer stated, “we have historically a lot of waste in the system we can take out.”
Volkswagen’s ‘Platform Thinking’ Production
The company would also move its production focus from a single model per factory to “platform thinking,” Schaefer stated, using the same design for various models to allow economies of scale.
“This, combined with standardizing battery chemistry, was key to achieving the carmaker’s goal of producing an entry-level electric vehicle for 25,000 euros or under,” Schaefer said.
“If you have 30-40 different battery cell and pack formats, it’s unmanageable. The focus is a clear standard across the brands, and full scale,” stated the chief executive.
“The only company that can scale on this territory at the moment is us.”
Volkswagen is heavily investing in dedicated, all-electric platforms, new battery and EV plants, infrastructure, and software developments.
