17 Nov 21

VW is getting serious about charging – here’s how

By 2025, VW Group wants to be the world’s market leader in EVs. That will require some serious investments in charging infrastructure, and that’s exactly why the automaker hired Elke Temme (pictured). 

Selling EVs is not just like selling cars. Buyers need the infrastructure that goes with it – and since it is not yet abundantly present, that’s also a job where manufacturers can outshine each other. Volkswagen Group has built up expertise and leadership in electric batteries and the Battery-Electric Vehicles (BEVs) that need them. But when it comes to charging infrastructure, it needs to catch up to competitors, notably Tesla. 

Following Fukushima

Enter Elke Temme. Ms. Temme (53) has almost 20 years’ experience working for RWE, Innogy and other mainstays of the German power industry. As a veteran of the industry, she has experience with major changes – as when Germany decided to close all its nuclear power plants, following the Fukushima disaster. 

In January, VW appointed her as SVP of the Charging & Energy business area at VW Group Components. In April, she was made CEO of VW Group’s own charging company, renamed Elli. At VW, Ms. Temme’s job will be to bring together the sprawling group’s energy activities and make them perform even better for its clients. 

Better also means bigger: the staff at Elli will double in size to about 200 in 2022. That’s after already having tripled in 2021. Ms. Temme doesn’t expect the efforts – which include considerable but undisclosed capital investments – to translate into profits in the short run. These are strategic investments, she said; investments in infrastructure.

€35 billion

VW has plans to spend €35 billion on EV batteries and BEVs by 2025. The group’s leading market position in this area is secure, at least through to 2030. However, it’s in the charging infrastructure itself that VW is at a disadvantage – not in the least compared to Tesla. 

Elon Musk’s brainchild has an expanding network of Superchargers rolled out across its major markets. Each of these 30,000 fast-chargers can provide a 200-km boost with just 15 minutes of charging, the company says. Tesla also claims that its network will increase threefold by 2024. 

By 2025, VW aims to have dethroned Tesla as the global EV market leader. To get there, however, the German manufacturer has some catching up to do. Especially in terms of charging infrastructure. 

45,000 fast-chargers

That’s why it’s throwing huge chunks of money at the problem. Specifically, €400 million by 2025, at which time VW wants to quadruple its own network of fast-chargers to 45,000 units worldwide (18,000 in Europe, 17,000 in China, and 10,000 in North America).

EU forecasts, however, indicate infrastructure investment on a much grander scale is needed. To be precise: €5 billion per year, every year until 2040, if the continent wants to be ready for the coming mainstreaming of EVs. 

Clearly, the overall need for charging infrastructure is much greater than any single player can provide. VW and Tesla have different ways of dealing with that imbalance between supply and demand. Tesla has its very own Supercharger network, which is – except for one pilot project in the Netherlands – still restricted to Tesla’s very own drivers. 

"Different approach"

Ms. Temme wants to pursue “a different approach than Tesla.” VW’s charging efforts include a share in Ionity, a Europe-wide fast-charging network. Other shareholders include VW competitors BMW, Mercedes-Benz, Ford and Hyundai. The Group also works with Enel in Italy, BP in the UK and Iberdrola in Spain to fill specific geographical gaps in the charging map. And last but not least, VW plans to make its own fast-chargers accessible for all EV drivers.

Ms. Temme says she sees VW’s charging strategy continuing with “partnerships, joint ventures, and mergers and acquisitions.” In line with this multi-pronged approach, VW is now even selling power to EV drivers – even if those cars are not produced by VW Group. One of VW’s electricity offers has already attracted more than 10,000 customers. 

VW also aims to make EV charging itself open and simple. For example, in Q1 2022, it’s launching ‘Plug & Charge’: the car will remember the owner’s payment details, and make contactless payments whenever the car is charging at stations that offer the service.

Will this be the killer app that drives EV customers towards VW? Perhaps. But whatever happens next, it seems clear that Elon and Elke have not yet fought their last battle. 

Image: VW Group

Authored by: Frank Jacobs