Volkswagen says more money needed for EVs as Audi starts e-tron production
13 September 2018
Volkswagen Group (VW) has warned that its ambitious plans to offer an electrified version of each model across all its brands will cost more than it estimated, forcing the company to deepen an efficiency push.
The company had originally suggested that the move to battery power would cost around €20 billion, a part of its €70 billion plan. However, CEO Herbert Diess has said this figure will not suffice, without giving a new estimate. It is clear, however, that the company will need to reduce expenses to help its electric vehicle (EV) push.
VW Group aims to launch 80 new EVs across its brands including Audi, Porsche, Skoda and SEAT by 2025 and will offer either a hybrid or full-electric version of each of its 300 models by 2030.
‘The burden for our company, such as the cost of bringing to market electric cars, will be higher than expected,’ Diess said in a joint interview with labour head Bernd Osterloh in VW’s internal newsletter. ‘This is particularly so since some of our competitors have been making more progress.’
Vehicle manufacturers are having to spend record levels in developing EVs, with the worry of breaching emissions targets on their minds. Many carmakers are already in danger of breaching targets set for 2021, and discussions are taking place on even stricter regulations for 2025 and 2030.
To meet these demands, the development of EVs is a priority for companies, and this means diverting resources and finances. BMW is looking to reduce options packages while VW is reducing model variants and Ford is cancelling development of certain engines. Company profits will also play a part.
‘We need higher profits to finance our future,’ said Diess. ‘4% is a minimum, 5% to 6% to allow for some future investments and with 7% to 8% we’re crisis-ready.’
VW’s Audi brand is preparing to launch its first EV; a premium SUV called the e-tron. The introduction of the car will come a couple of weeks after Daimler’s launch of its EQC model.
Production of the vehicle is soon to start at the company’s plant in Brussels. Over the past two years, the body shop, paint shop and assembly line have been modified, and the factory now has its own battery production.
Employees at the plant have received more than 200,000 hours of training to prepare for output of the EV, Audi said.
‘Audi built up numerous competencies in-house for the Audi e-tron and developed both the battery technology and the actual drive system itself. And employees rethought, planned and implemented many stages of production,’ said Patrick Danau, Managing Director of Audi Brussels.