VW Group plans EV expansion

VOLKSWAGEN has announced its plans to move into emerging markets such as India and China, which includes an expansion of its electric vehicle (EV) portfolio both worldwide and as an affordable option for the Chinese market.

Speaking at the annual media and investor conference in Wolfsburg, Germany, Volkswagen Group CEO Matthias Mueller outlined the plan to rapidly expand its range of electric and hybrid vehicles in the wake of the 2015 dieselgate scandal.

Mr Mueller announced that VW Group – which includes brands such as Audi, Skoda and Porsche – has plans to release more than ten electrified vehicles in the next two years, as well as intentions for more than 30 all-new pure EVs by 2025.

“We expect volumes to increase significantly each year until then,” he said.

“The Volkswagen Group will thus gradually assume the position of world market leader in electromobility.

“To that end, we will systematically develop and expand our battery expertise as I have described, from lithium-ion batteries through to technology leadership in solid-state batteries, which we aim to achieve by 2025.”

A big part of the electric expansion will take place in China, with the VW Group planning a joint venture with Chinese manufacturer Anhui Jianghuai Automobile (JAC) to bring a low-cost EVs to the massive Chinese car market.

Mr Mueller said VW Group was “in the advanced stage of negotiations” with JAC, adding that the partnership “would also be of great value to our customers, a sound environment and the Chinese society in general”.

Left: Volkswagen Group CEO Matthias Mueller

The first joint-venture JAC model is scheduled for a release in 2018, and will not be the only Volkswagen-partnered Chinese car on the road by that time.

VW Group is also working with Chinese brand First Automotive Works (FAW) on bringing a low-budget economy car to China under a new brand name.

It is understood that the new car will not be marketed as either a VW or FAW product, but as a new and as-yet-unnamed brand.

As part of the VW Group’s SUV offensive, it is expected the budget offering will be a high-riding wagon, and Mr Mueller said he expected the partnership to begin operation this year.

VW Group’s push into emerging markets is not only limited to China, with a plans to collaborate with Indian automotive giant Tata Motors to develop budget cars for the Indian market.

Skoda will spearhead the partnership on the Group’s behalf, and will work with Tata on developing an entire model family for both the Indian market and export.

It will be based on the A0 platform that underpins VW Group micro cars such as the Audi A1, Volkswagen Polo, and Skoda Fabia and Rapid, with Mr Mueller estimating the model line could be launched in India as soon as 2019.

“Our aim with the envisaged strategic partnership with Tata Motors is to lay the foundations in the Group and the brands that will enable us to offer customer-oriented mobility solutions in the emerging, fast-growing automobile markets, as elsewhere,” Mr Mueller said.

“By offering the appropriate products we intend to achieve sustainable and profitable growth in very different parts of the world. That is why we are systematically pursuing our regional growth strategy.”

Despite a financially rocky 2016 due to the fallout of the dieselgate emissions scandal, which included $US4.3 billion in fines handed down by the US Department of Justice, Mr Mueller was optimistic about the financial gains that could come as a result of pushing into developing markets.

“We are keeping to our financial targets for 2025: We aim to achieve an operating return on sales of seven to eight per cent and a return on investment of more than 15 per cent,” he said.