NEW AUTO Strategy
Volkswagen presented its plan for transforming the Group into a software-driven mobility company with a strong focus on its powerful brands and global technology platforms, providing synergies and scale as well as opening up new profit pools. "We set ourselves a strategic target to become global market leader in electric vehicles - and we are well on track. Now we are setting new parameters," said CEO Herbert Diess during the presentation of NEW AUTO, the Group's strategy through 2030. "Based on software, the next 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. The future of cars will be bright!"
Volkswagen Group is setting new priorities to leverage the opportunities arising from the electric and digital era of mobility, with sustainability and decarbonization as integral parts of its new strategy.By 2030, the Group plans to reduce its carbon footprint per car by 30% over its lifecycle (vs. 2018), in line with the Paris Agreement. In the same timeframe, the share of battery-electric vehicles is expected to rise to 50%, while in 2040, nearly 100% of all new Group vehicles in major markets should be zero-emission. By 2050 at the latest, the Group intends to operate fully climate neutral.
Profit and revenue pools are expected to shift gradually from internal combustion engine cars (ICEs) to battery-electric vehicles (BEVs) and then to software and services, boosted by autonomous driving. The ICE market is set to decline by more than 20% over the next 10 years. In parallel, BEVs are projected to grow rapidly and overtake ICEs as a leading technology. At an estimated €1.2 trillion, by 2030, software enabled sales could add around one third on top of the expected BEV and ICE sales, more than doubling the overall mobility market from around €2 trillion today to a projected €5 trillion. Individual mobility, based on cars, is expected to still account for 85% of the market and Volkswagen's business.
Software - Seamless, global software platform to enable intelligent and autonomous driving
Software will enable the seamless integration of NEW AUTO into the customers' digital lives and deliver even higher economies of scale. Volkswagen Group's automotive software company CARIAD aspires to develop the leading software platform by 2025, as one software backbone for all group cars. Currently, the entity is working on three software platforms.
Battery & Charging - Infrastructure as key to maximizing the "NEW AUTO" potential
Proprietary battery tech, charging infrastructure and energy services are key success factors in the new mobility world. Therefore, power will be a Volkswagen Group core competency by 2030, with the two pillars "battery cell and system" and "charging and energy" under the roof of the new Group division Technology.
Volkswagen Group plans to establish a controlled battery supply chain by setting up new partnerships and tackling all aspects from raw material to recycling. The goal is to create a closed loop in the battery value chain as the most sustainable and cost-effective way to build batteries.
In order to reach its goal, Volkswagen Group is advancing battery competence and reducing complexity. To that extent, it is 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.
The first location in Skellefteå, Sweden, will be operated by Northvolt AB. Volkswagen Group just invested an additional €500 million in its premium cell partner and works with Northvolt towards starting production in 2023.
For the second location in Salzgitter, Volkswagen Group yesterday signed an agreement with Chinese cell specialist Gotion High-Tech as its technological partner for a start of production in 2025. Together, both partners will develop and industrialize the volume segment of the unified cell in the German plant.
Mobility Solutions - autonomous driving will be a game changer
By 2030, Volkswagen Group will also have systems capabilities for autonomous shuttle fleets, owning some of them and expanding its offerings of mobility services and financing. Mobility as a service and transport as a service, fully autonomous, will be an integral part of NEW AUTO. The value chain consists of four business areas: the self-driving system, its integration into vehicles, the fleet management and the mobility platform.
Volkswagen Group is already at the forefront of development of a self-driving system for autonomous shuttles with its strategic partner ARGO AI. CARIAD will develop level 4 automated driving capabilities for passenger vehicles. The Group could thus create the biggest neuronal network of vehicles on the streets worldwide.
With pilot projects in Munich, Volkswagen Group is currently testing the first autonomous buses and is planning to roll out similar projects in other cities in Germany, China and the US. In 2025, Volkswagen plans to offer its first autonomous mobility service in Europe, shortly followed by the U.S. Future profit pools are very promising: by 2030, the total market for mobility as a service in the five largest European markets alone is expected to amount to $70 billion.
In the coming years, one platform is meant to integrate all mobility offerings from the Group and its brands, allowing Volkswagen to capture a significant market share and additional revenue streams. One vehicle fleet covering all different services from renting, subscriptions, to sharing and ride hailing will ensure high availability, occupancy rates and profitability.
Christian Senger, CTO of Volkswagen Commercial Vehicles, said: "By the end of the decade, automated driving will completely change the world of mobility. Together with ARGO AI, we are developing an industry leading self-driving system which will enable us to offer completely new mobility services and autonomous transport services. Volkswagen Group is aiming for a significant market share and additional revenue streams in this important future business."
Christian Dahlheim, Head of Group Sales, added: "The Volkswagen Group aspires to achieve a strong competitive edge in the field of mobility solutions. We will be able to offer services directly to our customers or cooperate with strong partners, depending on the specific situation in each market. One vehicle fleet for all services will enable us to operate very efficiently. Furthermore, our upcoming mobility platform will integrate all mobility offerings from the Group and our brands and thus maximize customer convenience."