Volkswagen’s “Transform 2025” Plan Calls For Automaker To Be #1 For EVs

1 month ago by Mark Kane 52

World’s Top 10 Plug-In Car Manufacturers – 2017 March (data source: EV Sales Blog)

Volkswagen has high hopes for its “Transform 2025+” scheme, a three-phase strategy that was designed to make the German brand the global market leader in e-mobility by 2025.

Now to be quite honest, and while we have seen a lot of movement on this front recently, we have heard this sort of “tough talk” from VW on more than one occasion in the past…and the world-domination goal just seems to stretch out further and further into the future each time.

Volkswagen I.D. Crozz

So, for now however Volkswagen must reconcile the fact it has failed to secure a spot inside the Top 10 plug-in car manufacturers for 2017, after finishing 5th in 2016.

Sales of electric Volkswagens are to reach 1 million annually by 2025.

“Volkswagen will also continue to forge ahead with its electric offensive. The long-term goal is clear: by 2025, the brand plans to be the world market leader in e-mobility and to sell 1 million electric cars per year. A key element in the strategy will be the I.D. family. This will initially consist off our models which are to be launched from 2020 onwards. As the first electric car, the I.D. will be produced at the Zwickau plant .”

As of today, Volkswagen current “you can buy it now” charge is lead by a new, longer-range e-Golf with up to 300 km (NEDC) range and maybe 200 km real (125 miles).

“Volkswagen’s electric offensive is also proceeding at a rapid pace. The new e-Golf, which has a range of 300 kilometers, already combines everyday practicality and customer benefit. In addition, Volkswagen has given some practical insights into the future of e-mobility with the I.D., the I.D. BUZZ,and the I.D. CROZZ. The I.D. family is based on a new electric vehicle architecture which will lay the technological and economic foundation for the majority of the Group’s future electric vehicles.”

As noted, the VW Group does have several new, more capable long range offerings in its queue, which start arriving in about 18 months time, first with the Audi e-tron quattro – of which, the company actually started taking reservation deposits for last month in Europe,

The Audi e-tron quattro is the platform that the VW Group’s EV revolution will be based

VW Press blast below (which ensures the automaker will continue to hold its current position as wordi-est OEM on the plant):

Volkswagen makes rapid progress with realignment

  • Brand CEO Diess: aiming for a leading role
  • The largest model offensive in the history of the brand has started
  • First quarter of 2017 provides a tailwind for the year as a whole
  • Pact for the future: measures will be implemented rapidly
  • SUV offensive and expansion of e-mobility to be strengthened
  • Restructuring programs in the regions are taking effect

The Volkswagen brand is making rapid progress with the implementation of its strategy “Transform 2025+” presented last November and with strengthening the profitability of its business operations. During the current year, the brand Board of Management not only expects further significant progress in all key strategic action areas but also substantial improvements in the key financial indicators following a strong first quarter. At the annual session of the Volkswagen brand held in Wolfsburg, Brand CEO Dr. Herbert Diess stated: “2016 was a pivotal year for the Volkswagen brand. It was a year of transformation. And a year that marked the start of a new phase for our company. We devoted immense energy to the diesel crisis. We initiated the transformation in business operations. And, we laid the groundwork for the strategic realignment of the brand. Our mission is clear: We want to make the Volkswagen brand competitive for the future. By 2025, we aim to play a leading role in the continuously changing automotive industry. “

Volkswagen is planning a transformation in three phases on the basis of the strategy “Transform 2025+”: by 2020, Volkswagen intends to realign its core business and to become the global market leader in e-mobility by 2025. From 2025, the focus is to be on new mobility solutions and business models in order to shape the major transformation in the industry from a leading position.

In the implementation of this strategy, evident success has already been achieved in all fields. For example, Volkswagen has agreed on demanding targets and measures under the pact for the future concluded last fall. These include more efficient ramp-ups, reduced working times through higher plant utilization and improved processes. Key decisions will safeguard the long-term future of the German plants. Starting from 2018, a new model for a sister brand will be produced in Wolfsburg. A fourth model for the Emden plant is in the development phase. The “Center of Excellence” at the Salzgitter components plant is responsible for the development, procurement and quality assurance of battery cells and modules. Pilot production is currently in the planning phase.

The SUV offensive, which is a key element in the product strategy, has been launched successfully. Volkswagen intends to significantly strengthen its presence in this segment and to expand the global model range from the initial two to 19 SUV‘s. With the Atlas, Teramont and Tiguan Allspace, we have introduced three new SUVs in recent months.

Realignment in the regions is also proceeding successfully. Our substantial restructuring programs are starting to bear fruit: in Northand South America as well as Russia, we have grown at an above-average pace and have gained market share during the first quarter. It is especially gratifying to note that deliveries in the USA grew by 10 percent and have almost reached the pre-crisis level within only one and a half years. Following the product lines, the regions also assumed full responsibility for their business at the beginning of the year – this is a key element in the brand’s endeavors to make the entire organization nimbler and faster and to improve its performance. The positive effects of autonomy are already becoming apparent. The regions can make faster decisions and are closer to the market and the customer.

Volkswagen’s electric offensive is also proceeding at a rapid pace. The new e-Golf, which has a range of 300 kilometers, already combines everyday practicality and customer benefit. In addition, Volkswagen has given some practical insights into the future of e-mobility with the I.D., the I.D. BUZZ,and the I.D. CROZZ. The I.D. family is based on a new electric vehicle architecture which will lay the technological and economic foundation for the majority of the Group’s future electric vehicles.

A strong first quarter of 2017 in terms of sales revenue, sales and return on sales

The current financial indicators show that the Volkswagen brand is on the right track. Volkswagen applied a new reporting structure for the first time in the first quarter of 2017. Previously the figures also included sales revenues and sales of other Group brands as a result of the consolidation of multi-brand importers and retailers. In future, these sales revenues and sales will be reported at the Group level together with the sales revenues of certain service companies not performing services solely for the brand.

For 2016, this would have resulted in restated sales revenue of about €74billion, instead of the figure of €106 billion previously reported. The operating result would have been €1.6 billion instead of €1.9 billion and return on sales would have been 2.1 percent instead of 1.8 percent.“Structural realignment makes the Volkswagen brand more transparent, allows better comparison of our financial indicators with those of our competitors and allows management to focus on the core activities of the brand,” Dr. Arno Antlitz, member of the Volkswagen brand Board of Management for Finance, explained.

Volkswagen started 2017 significantly better than the two previous years. With deliveries of about 862,000 vehicles, sales revenue reached €19.0billion and the operating result rose to almost €0.9 billion. The operating return on sales improved to 4.6 percent. Factors which had a positive Page 3 of 4 impact were volume development, price and mix effects, the reduced useof sales aids, exchange rate effects and a significant reduction in product and fixed costs.

“By exercising strict cost discipline, we succeeded in keeping our fixedcosts at or around the previous year’s low level in the first quarter of 2017 despite the planned SUV offensive and despite the advance outlay required for our electric architecture and digital ecosystem,” said Antlitz.

Outlook for 2017: higher profitability

For 2017 as a whole, Volkswagen predicts that the positive business developments recorded in the first quarter will continue. Sales revenue is to increase by up to 10 percent over the comparable figure for the previous year and the operating return on sales is to be at the upper end of the predicted forecast range of 2.5 to 3.5 percent. Antlitz: “This means that weare on course to achieve our mid-and long-term margin targets of at least 4 percent by 2020 and 6 percent by 2025. We will examine these results targets with a critical eye and raise them the moment we consider that what we have achieved is sustainable going forward. Until such time, we will concentrate on implementing the pact for the future and our strategy Transform 2025+.”

Determined implementation of strategy

In the further implementation of its strategy, Volkswagen intends to continue the successes achieved to date over the course of the year. “The first good quarter gives us a tailwind for the coming months. However, it is also clear that this year cannot be taken for granted. It is now crucial that we resolutely stay the course and continue to carry out our tasks,” said Brand CEO Diess.

The main focus in the current year will be on strengthening competitiveness. Volkswagen intends to increase productivity this and next year by 7.5 percent. Improved ramp-ups, cost discipline and the continuing product and profitability offensive in the regions will also contribute to competitive positioning. In North America, Volkswagen plans to launch two new models each year up to 2020. The losses in this region are to be significantly reduced this year and the brand plans to reach break-evenpoint in North America in 2020. This target date also applies to all the other regions which are currently not recording a profit. In South America, Volkswagen will continue to implement the restructuring program. At the same time, the product portfolio will be rejuvenated and broadened. In China, it will be vital for Volkswagen to defend its market leadership, for example with nine further models by 2018. The main focus will be on locally produced new energy vehicles.

Across all regions, Volkswagen has started the biggest product offensive in its history with a view to stabilizing and gaining market shares. More than ten new models are being launched this year alone. Five of those are genuine new products without predecessors. By the end of 2018, seven new SUVs will be launched globally – two of them before the end of this year. Among these, the T-Roc will make a key contribution to the increase in volumes and earnings.

Volkswagen will also continue to forge ahead with its electric offensive. The long-term goal is clear: by 2025, the brand plans to be the world market leader in e-mobility and to sell 1 million electric cars per year. A key element in the strategy will be the I.D. family. This will initially consist off our models which are to be launched from 2020 onwards. As the first electric car, the I.D. will be produced at the Zwickau plant .

Volkswagen is also stepping up the pace in the key future area of digitalization. This year, Volkswagen is launching the new generation of Car-Net and will begin with the first mobility services. In addition, VW customers will soon be able to have their vehicles retrofitted with the system.

“Volkswagen is making progress with realigning the brand, as the first quarter shows. Despite significant risks, we are confident that we will be able to continue the positive development of the brand, meet our demanding schedule and also achieve our financial targets.” said Brand CEO Diess.

Modification of diesel vehicles proceeding to schedule
Another key topic in the current year is the modification of the diesel vehicles. Volkswagen is making progress to schedule in this area. InEurope, more than half of the vehicles have already received the necessary software update. In Germany, this figure is nearly three-quarters. This means that over 2.6 million vehicles have been modified. By the end of the year, all Volkswagen brand vehicles are to be modified.

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54 responses to "Volkswagen’s “Transform 2025” Plan Calls For Automaker To Be #1 For EVs"

  1. KM says:

    Not so long ago they were saying that 20% of their sales would be EVs by 2025 (that would be over 2mln pa). Now it is 1 mln. Sounds like they are getting less ambitious.

    1. Chris S says:

      1 million is the target for their core brand

    2. philip d says:

      Back in 2010 right before the launch of the first gen Leaf and Volt the CEO of VW made a bold claim that by 2016 they would be the world leaders in electrification of their fleet.

      I’ve posted this quote before but don’t have it on hand.

  2. MaartenV-nl says:

    By producing in 2025 the number of cars Tesla intents to produce in 2020 they think to become world leader?

    1. Mr. M says:

      Sure, what could go wrong 😀

  3. Texas FFE says:

    I don’t believe VW but I think all the manufacturers that made EV sales predictions are having to backslide and I think Tesla is going to be the worst. Tesla built 25,000 cars so far this but predicted 200,000 for 2017. Tesla is going to have to double production every four months to make the prediction, I predict it’s not going to happen.

    1. Rob Stark says:

      The only thing Tesla has predicted for 2017 is 100k Gen II vehicles plus a run rate of 5k Model 3s per week at some point in Q4 2017.

      For 2018 Tesla has predicted a total of 500k cars including reaching a run rate of 10k Model 3s per week at some point in 2018.

    2. Red Sage says:

      Elon Musk did at one point say that he hoped for a best case Production of Tesla Model ☰ at 100,000 to 200,000 units during 2017, but that it was an unlikely goal. Third parties have been projecting up to 100,000 units of Generation II vehicles, Model S and Model X, during 2017. The 25,000 units moved in Q1 2017 seems to support that notion. Keep in mind that at the high end for Generation III, Model ☰ Production goals, and presuming that begins perhaps in July 2017… The new car would probably have to begin at a build rate at least twice that of Model S and Model X combined, and finish the year at around four times that amount. So, probably not going to happen. But, even if Tesla only does 50% of their goal for Model ☰, that would be from 50,000 to 100,000 units of that vehicle, added to 100,000 units of Model S and Model X combined. So, anywhere from 150,000 units to 200,000 units Produced during 2017 should be feasible, even if perhaps only 80%-to-90% of those reach end users.

  4. Amperaguy says:

    It is peculiar that dieselgate stopped VW’s growth in EV sales, but didn’t seem to hurt their ICEV sales.

    1. trackdaze says:

      Diesel is a bloodbath in europe at the moment and you would expect vw to be heavily affected.

      1. trololo says:

        Really ? Sources ? I did not read a single article about that.

  5. unlucky says:

    I’ll be shocked if a large percentage of these are EVs. Surely VW is pulling the same stunt as BMW and calling plug-ins EVs.

    1. Pushmi-Pullyu says:

      “There you go again.” — Ronald Reagan

      PHEVs are EVs. Get over it.

      1. David Cary says:

        Well the European 10 mile ranges just to satisfy regulations are not at all the same as a BEV from the vantage point of reducing carbon emissions. A Volt that is driven 90%+ miles on electricity is not the same as a European PHEV.

        In the European market, there is a less consistent access to a garage with a plug. Have we seen average EV% by telemetrics yet for some of these small battery PHEVs?

      2. Red Sage says:

        No. Plug-In Hybrids are hybrids with a larger reserve battery and a plug that are typically built with lower overall range than the hybrid version at a premium price point over them. They are not EVs. Face facts.

        1. Someone out there says:

          They are driven by an electric motor. That makes it an electric vehicle.

  6. Someone out there says:

    I think they can position themselves well but they are going to have to work for it. Looking at their concepts though I think they can do it. Electrify America can help them if they make a serious effort.

    1. John says:

      Electrify America stations, do you have to pay to charge? Is it free?

      1. Red Sage says:

        You can see what details are available at this link:

        https://www.electrifyamerica.com/our-plan

        Funny… I thought for sure that it had been reported that Electrify America was not to show any connection to Volkswagen at all… But the first page of the website has a line that reads, “Volkswagen Group of America is investing $2 billion over the next 10 years in Zero Emission Vehicle (ZEV) infrastructure and awareness, representing the largest commitment of its kind to date. We will build a nationwide network of workplace, community, and highway chargers that are convenient and reliable. Our investment will enable millions of Americans to discover the benefits of electric driving.” under ‘Our Challenge’… But the ‘Our Plan’ section of the site reads instead, “Electrify America will invest $2 billion over the next 10 years in Zero Emission Vehicle (ZEV) infrastructure and education programs in the U.S. $1.2 billion will be invested nationwide (in states other than California), while $800 million will be invested in California, one of the largest ZEV markets in the world. This investment represents the largest of its kind ever made.”

  7. Lawrence says:

    These announcements are so detached from reality that VW’s motives are suspect. Their eGolf was such a low development budget, lazy attempt at entering the EV market and now they claim that they have plans to the leader in EV’s?

    1. trololo says:

      I hope I am wrong but it looks like vaporware: VW customers, if you want a VW EV, just wait …

    2. Aaron says:

      They’ve said they want to be the world leader in EVs for many, many years. This is just another empty press release.

  8. ffbj says:

    VW is dead, to me.
    You can screw all of the people some of the time, or some of the people all of the time, but you can’t screw all the people all the time.
    Apologies to P.T. Barnum.

    1. georgeS says:

      ffbj,
      Yeh dead to me too. They seem to have all their big plans right in step with the CARB regs. Failing that the german governments regs. All they are doing is playing the game at the least acceptable rate to squeek by….just like the big three here in the US.

  9. pjwood1 says:

    I wish there weren’t money in the VW stories, but from time to time we think about nothing. It’s time you don’t get back. So,don’t take long 😉

  10. Mr. M says:

    1 million by 2015 is a very low goal. That is only around 10% of VW sales. BMW has already ~4% of their sales through plug-in cars today.

  11. David Murray says:

    Maybe VW knows the EV market will be more viable because they sort of have an idea what the charging infrastructure is going to look like…. since they are the one paying for it. 🙂

  12. Tech01x says:

    Volkswagen deserves to be cut down dramatically for not only being willing cheaters, but the continual deception and covering up even after being caught:

    https://www.nytimes.com/2017/05/06/business/inside-vws-campaign-of-trickery.html

    If, as a consumer, you care about rewarding the “right” companies for doing the right thing, you should also care about punishing the behavior that VW exhibited. No VW or Audi or any owned subsidiary (Porsche, etc) should be sold in the U.S. for a period of at least 3 years. And they should fully compensate the dealers for having to close down those dealerships.

    1. Chris S says:

      In a state of law judges determine the appropriate punishment. If you take this into your own hands you are nothing more than a vigilante.

      1. John in AA says:

        Hyperbole much? The only thing a consumer can take into their own hands is their individual buying decision. If I choose not to spend my money with VWAG that doesn’t make me a “vigilante”.

        Now excuse me while I recline on my fainting couch and clutch my pearls.

        1. Chris S says:

          This kind of collective judgement will be unjust. Those assembling the cars deserve it but those selling them should get compensation?

          1. John in AA says:

            I seriously cannot even fathom what you are talking about.

            Please feel free to give your life savings to VWAG if you like, though! Although you should hang your head in shame for harming the innocent GM workers you are depriving in so doing.

    2. David Murray says:

      What you are suggesting would have essentially put the company out of business. All of the dealers would have also had to close down for 3 years and file for bankruptcy. The punishment should fit the crime. Your suggestion is like giving somebody the death penalty for stealing a candy-bar.

      1. Alonso Perez says:

        You do understand that in Europe, where thanks to the German push for diesels, combined with VW exceeding limits by 10x or more, people will quite literally die sooner than they otherwise would have. The air in cities like London and Paris is dreadful. This is not the theft of a candy bar.

        Whether the company “deserves” to go broke is a moot point. Nobody would allow such a thing. But they deserve not to be profitable for long enough to hurt. This is for a simple reason: so other companies get the message that pollution controls are serious business, not candy bars.

      2. David Cary says:

        Gotta agree with Perez here. A candy bar? You are not in the health care field I am going to guess. What VW has done is be responsible for possibly more premature deaths than any other corporation in the history of the world. Now that is hyperbole! But probably true….

        The right penalty would have been prison terms for anyone that knew and helped cover up. Rather simple without bankruptcy or sales bans.

        1. David Cary says:

          But barring government that does rational things, our only recourse is as consumers. So it will be a cold day somewhere to get me to buy a VWAG car.

      3. Red Sage says:

        Volkswagen didn’t exactly steal a candy bar… It was more like they marketed sugar free, fat free, cholesterol free, gluten free candy bars ‘with all the taste you crave’ that sold like blazes — when they actually were chock full of all those things. No, the death penalty would not be appropriate, I agree… But a severe penalty was certainly in line with making sure no one else tried to ‘get away with it’ — anymore. And, insisting that Volkswagen support the propagation of actual clean technology vehicles as opposed to the faux ‘clean diesel’ vehicles they had sold is a move in the right direction, while giving them the opportunity to survive their own missteps.

    3. Pushmi-Pullyu says:

      Tech01x said:

      “No VW or Audi or any owned subsidiary (Porsche, etc) should be sold in the U.S. for a period of at least 3 years. And they should fully compensate the dealers for having to close down those dealerships.”

      I of course understand the very human desire for punishment for crimes, but there’s a very basic fallacy here: We can’t punish a corporation. A corporation is just a legal entity, not a real person. The courts have created the legal fiction of a “corporate person”, but this “person” isn’t someone you can throw in jail or otherwise subject to actual punishment.

      Corporations don’t commit crimes, people do. “Punishing” the entire corporation means punishing all the employees and stockholders for the crimes of, probably, only a small percentage of VW executives and employees.

      By all means, let us identify those people who actually committed the crimes, and punish them. Unlike VW, we can throw real people — real criminals — into jail. I find it a crying shame that there has been no attempt to identify individual culprits in the “dirty diesel” scandal… or scandals, since the cheating extends far beyond just VW.

      Forcing VW out of business — and that’s what you’re actually talking about, whether or not you admit it — would cause far more harm than benefit to society as a whole.

    4. Red Sage says:

      Few get what they deserve, whether it be punishment or reward.

      Honda was treated as if they had ‘cheated’ simply by proving it was possible to build a Midsize car that met CAFE, CARB, and NHTSA ratings simultaneously. So CAFE regulations were raised, CARB conditions were made more stringent, and NHTSA crash tests were created specifically to kill Hondas. That completely changed the fundamental philosophy of the company so that their previous goals could no longer be met — and they did NOTHING WRONG.

      So, yeah… I’m perfectly OK with Volkswagen getting theirs for actually cheating — but that isn’t how the world works. Volkswagen is another company considered ‘too big to fail’. So, they will be celebrated for ‘getting away with it’ for so long before being found out. And they will be rewarded with the ability to continue business, while promising to ‘do better, honest’. We’ll see.

  13. Rich says:

    VW, the masters of Propaganda and extreme Pollution. Their PR (Propaganda Reinvented) dept. is at it again. I’m sure in the year 2125, they’ll lead the EV market. No, that date wasn’t a mistype.

    1. Bill Howland says:

      Hehe, yeah, VW is already NUMBER ONE:

      In the number of designs and concepts it has released (somewhere around 80 models if memory serves)..

      Too bad in the states the only thing we could get up until recently is a ‘me too’ egolf. Supposedly they have one or two 18 mile range Audi’s on the market right now.

      But that is quite different than being able to TAKE OVER THE WORLD.

      1. Rich says:

        Is the eGolf for sale in all States? VW said they would sell it nationwide but I haven’t seen it available outside of CARB States.

        1. Nada says:

          They said the new version with a 125 mile range of the eGolf would be sold in all states…
          That just barely started production so it would be months before they reach th US dealers…

  14. Scott Franco says:

    They can transform themselves into Paris Hilton and a six pack and I still would not buy from them.

    1. William says:

      Still wouldn’t hurt to kick the tires and get a hood wink!

  15. Martin T. says:

    VW # plug in – oh my I can’t stop laughing, must be the same management school as GM USA / Australia saying they would be #1 in car sales by 2020.
    Google it – as that ain’t working out so great for them LOL!

    Do these highly paid executives think that these amazing shoot for the stars targets are believable by either their own employees? When customers know they are real corrupt deceitful German monkeys in expensive European suits when they make outrageous BS statements like this.

    Few years ago VW was not remotely interested in electrics, it took diesel gate to make them re-think (but is it enough).

  16. Joe says:

    I hope VW is sincere. I lost faith in this thought because e-golf is available in 4 provinces in Canada but it doesn’t seem to be manditory for all dealers to participate. I know of atleast one that chose not to sell the E golf. VW should make it manditory. It is not a good start to being #1.

  17. Rick Bronson says:

    VW will not do all these things for these reasons.
    1. Diesel and Petrol/Gasoline engines are their priority.
    2. Part of the shares in the company is held by Oil exporting Arab country.
    3. They don’t want to give up what they have learnt with the combustion engine.

    We all saw what happened to their “1 liter car”, “ID” and so on.

    1. David Murray says:

      Even the oil companies see the writing on the wall. The Ev age is coming. VW knows this just like all of the other auto makers. So you better believe they are getting ready for it. We’re still in the calm before the storm. The storm starts building about the time the Tesla Model 3 starts being sold…. the storm will be in full force in 2-3 years after that.

  18. Pushmi-Pullyu says:

    “As noted, the VW Group does have several new, more capable long range offerings in its queue, which start arriving in about 18 months time…”

    That sounds good, but are these going to be high-volume production vehicles, or just compliance cars, or — like the Bolt EV — something in between?

    If VW is tooling up to produce PEVs (Plug-in EVs) in large numbers, then where are they gonna get their batteries from? As I recall, VW has been talking about the possibility of building a high-volume battery factory, but have they actually started building it yet? I think not!

    And until they do start building one or more high-capacity battery cell factories, then all their talk of being #1 is just hot air.

    “Actions speak louder than words.” It’s long past time for VW to quit talking, and start doing.

  19. evnow says:

    Shouldn’t Nissan, Renault and Mitsubishi be combined to make it the #1 manufacturer of plug-ins ?

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