Volkswagen Group CEO: Transition to electric vehicles cannot yet be accelerated
The switch to electric cars cannot be accelerated faster, warns Volkswagen Group CEO Herbert Diess.
Speaking at the Financial Times Future of the Car summit, Diess laid out his ambitions for 7-8% of Volkswagen Group sales to be electric this year, to 25% by 2025 and 50-60 by 2030 % are increasing, stressing that the problem with Faster Growth is not due to customer demand, but rather creating infrastructure to support their manufacture and operations.
“Everything will be there for growth, but it takes huge investments and time to achieve it,” said Diess. “We need the right facilities to modify or build them, make battery production capacity available and build a safe, sustainable supply chain.
“The customer needs the right infrastructure to be able to live with the cars.”
This reversed the German conglomerate’s investment in six battery manufacturing plants in Europe at a cost of €2-3 billion each as an example. Late last week, the company confirmed that it would set up one of these plants in Spain to supply batteries for production lines building new city electric vehicles from Volkswagen, Cupra and Skoda from 2025.
“Our goal is to be the global leader in electric vehicle sales by 2025. We have a very ambitious plan to achieve that and have invested heavily to achieve it, but some analysts are not taking the effort required to reach our goals seriously enough,” Diess said.
Diess acknowledged that Volkswagen Group will likely be in a close battle with Tesla through 2025 to lead electric vehicle sales, adding: “It’s going to be a close race. I have to say that we didn’t expect our main competitor in the US to be so fast and their manufacturing capabilities will fundamentally change, but we have more brands, from premium to mainstream, so we will keep our ambition.”
Diess also addressed the role that the Volkswagen Polo format EV – due to launch in 2025 under the Volkswagen, Cupra and Skoda brands for around £17,000 – would play in boosting volume.
“It made sense to go top-down into electric vehicles, but by 2025 we believe the time will be right for a Polo-sized car,” he said.
“We have a new generation of batteries; apart from rising raw material prices, our costs are now going down with scale.
“The demand is there and the margins are there for small electric cars to be profitable.”