While 2019 is quietly winding down as many retreat home for the holidays, Volkswagen is already scheming for 2020. The German automaker will launch 34 new models next year, according to the automaker’s recent announcement on the progress toward fulfilling its transformation strategy. The announcement of numerous new models also included news the automaker would be investing €19 billion in future technologies through 2024. Of that, €11 billion will go towards VW’s e-mobility development – the company’s EV rollout strategy.
The investment and new models are the latest signals from the automaker that it continues to work toward its commitment to achieving a carbon-neutral balance by 2050, along with cutting its CO2 emissions in half by 2025. The bold proclamations and aggressive electric strategy come as Volkswagen, and its corporate siblings continue to handle the fallout from the Dieselgate scandal. Earlier this month, German authorities raided VW’s headquarters amid new diesel cheat accusations.
Part of the company’s rebranding is its ID electric vehicles, which have already entered production. The first is the ID.3, which the U.S. won’t receive. It offers up to 342 miles of range (550 kilometers). VW also showed the ID.4, which will be the U.S.’s first VW ID electric vehicle, which should arrive late next year. VW’s longterm goal is to launch 75 electric vehicles and 60 hybrids by the end of the next decade. The ID.3 is the first of many new vehicles that will come from the automaker.
Volkswagen plans to sell 26 million electric vehicles by 2029, with an additional six million hybrids. Underpinning 20 million of those will be VW’s Modular Electric Drive Matrix (MEB) platform. Another six million will ride on VW’s Performance Platform (PPE). By 2022, VW will build EVs at 16 different factories around the world. The company has an ambitious longterm goal that could change drastically by 2030. Right now, VW is laying the building blocks for an entirely new era of cars, and that’s exciting.
Volkswagen making good headway with transformation
The Volkswagen brand will be launching 34 new models worldwide next year, including twelve SUVs and eight electric or hybrid vehicles. Volkswagen COO Ralf Brandstätter commented: “We are at the beginning of a new era. We mean business with e-mobility. The brand will be investing €19 billion in future technologies through 2024, €11 billion alone in the further development of e-mobility. And Volkswagen starts the biggest electric offensive in the automotive industry next year: The ID.3goes on sale in the summer, soon followed by the ID.Next, our first electric SUV. Our ID. family makes emission-free mobility accessible to many people for the first time. That is New Volkswagen.”The brand continues to stand by its commitment to the Paris climate goals. Vehicles and the company are to achieve a carbon-neutral balance by 2050. CO2 emissions from production are to be halved by 2025. Volkswagen is well on track in this respect thanks to its electric offensive.
The digital transformation roadmap is an important stepping stone for the company in its modernization and digitalization efforts. Signed off in 2019, the roadmap follows on from the pact for the future and focuses in particular on further improvements in competitiveness and earnings power over the coming years. It also lays the groundwork for expanding the software expertise of the brand and the Group. The Car.Software organization will already begin operating as an independent business unit in January 2020. By 2025, the in-house share of car software development and vehicle-related services is to rise from under ten percent today to at least 60 percent.
2019 sees the Volkswagen brand in the homestretch. COO Brandstätter underscored the strong team performance: “In a shrinking overall market the Volkswagen brand has won market shares worldwide and significantly improved its operating result. Ongoing restructuring of core business, including the positive effects of the pact for the future, and the success of the worldwide SUV offensive have been key to this achievement. Improved earnings in the regions and successful WLTP management have been just as important.” The pact for the future signed in 2016 is also bringing results. Some €2.6 billion of the planned €3 billion cost savings will have already been achieved by the end of 2019.
CFO Arno Antlitz said: “Our strategy is gaining a foothold. Our vehicles are convincing customers and our consistent discipline with respect to costs and investments is having a positive impact. We therefore confirm our target of an operating return on sales of four to five percent for the full year 2019 in a difficult market environment. As announced, we expect to generate cash flow from operating activities significantly in excess of one billion euros in 2019. Our financial targets for 2020 remain unchanged. Furthermore, we reaffirm our targets for 2022 of an operating return on sales of at least six percent and cash flow in excess of 2 billion euros.”
Production has also become more efficient in 2019, with the brand exceeding its annual productivity improvement target of five percent. The improvement by the end of the year is expected to be more than seven percent.
Last, but not least, 2019 was a successful year for vehicle premieres: In particular the Golf 8 and ID.3 as well as the T-Cross, Teramont, T-Roc R, and T-Roc Cabriowere extremely well received by customers.