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VW future: 44 billion for e-cars, 7,000 jobs will be lost

Volkswagen revises 5-year plan
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New investments

The Volkswagen Group will invest a total of 44 billion euros in the next five years Invest in electromobility. This includes the corresponding fully electrified vehicles, but also expenses for development services in the areas of autonomous driving, new mobility services and digitization relating to vehicles, production and sales. The 44 billion euros correspond to about a third of the planned total expenditure in the next few years. Volkswagen is investing so much because the stated goal is: To have developed more than 50 all-electric vehicles in the Group by 2025 and to offer customers the appropriate variety.

'We are looking into participating in a battery production facility,' says Diess . He also revealed that he would not rule out starting his own battery cell production and that this is also being checked internally. Diess could work out the stake with one of the strategic battery cell suppliers (SKI, CATL, LG Chem, Samsung). Background: For the Volkswagen Group alone, we forecast an annual demand of almost 150 gigawatt hours by 2023. At the moment there is only capacity for 20 gigawatt hours in Europe.

New plant allocation decided

To increase efficiency and reduce complexity in the VW group plants, a production rotation - quite extensive for VW - was decided. In addition to Zwickau, the production plants in Emden and Hanover will also be converted to the production of electric vehicles. The Passat, which previously rolled off the assembly line in Emden, will be assembled in Kvasiny, Czech Republic, from 2023 together with the identical Skoda Superb. Diess plans to relocate the production of the Skoda Karoq and the Seat Ateca, which are currently being built in Kvasiny alongside the Superb, to a new multi-brand plant in Eastern Europe. The location search for the new plant is already in progress. And Hanover will remain the home of the 'Bulli' in the future. From 2022 the I.D. Buzz family roll off the assembly line in several versions.

The depth of added value for electric cars is up to 30 percent lower than for conventional vehicles. So that would havehas resulted in job losses. 'We have therefore agreed with the works council to convert the Zwickau, Emden and Hanover locations into the largest e-production network in Europe,' said Diess after the Supervisory Board meeting in Wolfsburg. That means: There will be no redundancies in Emden and Hanover until 2028. As the FAZ reports, around 7,000 jobs are to be cut at the Emden and Hanover locations in the next three years. This should be done through natural fluctuation and partial retirement. Fixed-term employees are to be offered contracts with Porsche and the VW plant in Kassel.

Diess announces price increases

The CEO also emphasized that the planned cooperation with the US manufacturer Ford relates to Europe expressly applies to light commercial vehicles. There are major shifts and interesting perspectives in this segment. 'As part of the extensive alliance with Ford, we will reduce costs, increase performance using scales and expand our range of products for commercial customers,' said Diess. That means in plain language: The VW Amarok pick-up gets further derivatives through the possibilities within the Ford cooperation. Diess also said that other areas of cooperation outside of the segment have also been identified. And by that I meant the cooperation regarding autonomous driving services or mobility services. “Here, too, we see potential for cooperation”.

“In order to be able to finance the high expenses for the future and remain competitive, Volkswagen must become more efficient, productive and profitable,” said Diess. The Volkswagen Group is therefore working hard to improve earnings in all brands and companies. To this end, programs have been set up to secure the agreed goals. “The number of our multi-brand plants will increase in the next few years. Our goal is to increase productivity in the group of plants by 30 percent by 2025 '.

Here, too, the CEO revealed the background: The operating margin in the group must be around seven percent - over the entire planning period . It is very hard work, according to Diess, to achieve this, 'but we will not do it any other way.' Diess indirectly announced price increases across the entire range of brands. 'I have to say that we have to revise our price positioning,' said Diess, 'and the prices for some models cannot be maintained'.

What has happened so far

Volkswagen's electric car - The timetable so far looked like this: The ID golf size. In the same year, VW wants to put a total of 100,000 electric vehicles on the streets. In 2025 it should be one million electric VWs per year. That VW CEO Herbert Diess thinks much bigger on the subject became clear recently in an interview with the US industry magazine 'Automotive News'. The plants have capacities for 50 million electric car platformsbooked, the battery manufacturers CATL (serves China), LG and Samsung (both serve Europe) have ordered just as many batteries. 'We will be big in the electric car business worldwide because we are very strong in China,' said Diess. The cooperation with the battery cell manufacturer SK Innovation (SKI) from South Korea, with which the Volkswagen Group has nominated another strategic supplier for electric vehicles based on the modular electrification kit (MEB), is brand new. SKI will cover the demand for North America and part of the demand for the production of all-electric vehicles in Europe.

Overall, the MEB brings much better opportunities for synergies. A representative of the I.D. series is expected to save around 40 percent compared to the E-Golf, but with twice the range and more space. 'We have the best development strategy for electric vehicles,' said Diess. That is why they are basically open to licensing the MEB for other manufacturers. Diess also believes that the electric trend will stop the SUV boom because sedans can achieve a range that is up to 50 miles higher than large SUVs.

Media: VW is planning an electric car for 18,000 euros

Diess also made it clear that VW would not immediately put everything on the electric car card. The gasoline and diesel engines are also being further developed and made more energy efficient. This was also demanded by the markets in which electric cars will not be an issue for the foreseeable future, also due to a lack of charging infrastructure. He also sees a need to catch up in the entire automotive industry, but especially in the VW Group, when it comes to the digitization of traffic: “We are not yet one hundred percent prepared for the car to be an end device for Internet use.”

Meanwhile reports the Bloomberg news agency that VW is planning an electric car for around 18,000 euros. According to insiders, it should be a small crossover car that will be built in the Emden plant. The medium-sized electric sedan I.D. Aero produces. The Passat, which was previously built in Emden, will now officially move to the Czech Republic in 2023.

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