14 Jul 21

VW's New Auto strategy is about electrification & mobility services

Volkswagen Group CEO Herbert Diess has presented its New Auto strategy, containing its ambitions to electrify its portfolio, to consolidate platforms and to introduce new software and mobility services.

“We set ourselves a target to become global market leader in electric vehicles and we are well on track,” said CEO Herbert Diess (pictured on top) during the presentation of New Auto. “Based on software, the next and much more radical change is the transition towards much safer, smarter and finally autonomous cars. That means for us: Technology, speed and scale will matter more than today.”

By 2030, VW plans to reduce its carbon footprint per car by 30% over its lifecycle compared to 2018 levels. In the same timeframe, the share of battery-electric vehicles is expected to rise to 50%. In 2040, nearly 100% of all new VW Group vehicles should be zero-emission – in major markets, at least. And by 2050, the Group intends to operate fully climate neutral.

VW expects the ICE market to decline by more than 20% over the next 10 years but at the same time, BEVs are projected to grow rapidly. By 2030, software enabled sales could amount to €1.2 trillion, adding around one third on top of BEV and ICE sales. Nevertheless, Volkswagen projects individual mobility will still account for 85% of the market and of VW’s own business.

Integration into customers’ digital lives

Volkswagen promises its software will integrate seamlessly into customers’ digital lives while also delivering economies of scale.

A first iteration allows for upgrades and over-the-air updates of the MEB product portfolio, including the VW ID.4, the Skoda Enyaq and the Cupra Born. In two years, a premium software platform will be released, which will offer a variety of functions like a new unified infotainment system and over-the-air updates for Audi and Porsche models. Another two years later, the Group will launch a new unified, scalable software platform and end-to-end electronic architecture. It will also be level 4 ready, meaning that customers can hand over the steering to the car.

Infrastructure as key to electrified potential

Volkswagen Group believes having proprietary battery tech, charging infrastructure and energy services are key success factors in the new mobility world.

In order to reach its goal, VW is building partnerships to control the whole process from sourcing raw materials to recycling end-of-life batteries. The company is also introducing one unified battery cell format with up to 50% cost reduction and up to 80% use cases by 2030. Six giga factories in Europe with a total production capacity of 240 GWh by 2030 will help to secure battery supply.

Volkswagen Group intends to offer customers a one-stop solution from charging hardware to Energy Management Services. Ultimately, the Group plans to build an entire charging and energy eco-system around the vehicle, ensuring convenient charging to customers and opening up further business opportunities.

Autonomous driving & mobility services

By 2030, VW pledges to have system capabilities for autonomous shuttle fleets, owning some of them and expanding its offering of mobility services and financing. Mobility-as-a-Service and transport-as-a-service are also a part of the New Auto plans.

Volkswagen is already developing self-driving systems for autonomous shuttles today, with pilot projects in Munich and plans to roll out similar projects in other cities in Germany, the US and China. In 2025, VW intends to offer its first autonomous mobility service in Europe, shortly afterwards followed by the US.

Photo: Volkswagen CEO Herbert Diess presenting the New Auto strategy (copyright: Volkswagen Group)

Authored by: Benjamin Uyttebroeck