CEO says VW could face the same fate as Nokia if it doesn’t adapt.

Volkswagen group CEO, Herbert Diess, recently announced that the German car making giant would stop funding its fuel cell program because FCEVs aren’t seen as competitive in the next decade. The decision has been taken within the group to focus entirely on battery-powered electric vehicles that are seen as a much sounder bet for the near future.

He recently told Reuters that if VW doesn’t change itself to provide the kinds of vehicles that the market actually wants now, it could face the same fate as Nokia. The Finnish mobile handset maker, which used to be a world leader, is nowhere near as big a player as it once was, losing out to the likes of Apple and Samsung because it couldn’t adapt to changing market trends.

So in order to stay competitive, Diess says VW will have to devote its resources towards becoming a manufacturer of electric, connected cars and move away from traditional fuel-burning vehicles. And since battery electric vehicles seem like the hot ticket right now, VW wants to put all its eggs in that basket.

Diess is convinced “the era of the classic carmakers is over,” and that in order to ensure the company’s longer term success, it must fully embrace the EV trend. It is not the first time he has expressed his view that hydrogen fuel cells are not the way to go (at least for another decade), but it’s the first time he has actually announced development work on this tech will be dramatically scaled down.

At the same time, one of the VW group brands, Audi, is expected to launch a limited series FCEV sometime this year, or in 2021. What will become known as the Audi h-tron may be a China-exclusive model, though, especially since the Chinese government is offering subsidies for the development and proliferation of vehicles that have this kind of power source.

Volkswagen recently announced that it has raised its EV sales target for the next few years. It is confident it can shift 1.5-million vehicles from its new ID family of models by 2025. The first is the ID.3 whose production started in November, 2019; the automaker says it has over 37,000 reservations for the model, and as it adds more electric models into its lineup, it will broaden the appeal of its ID. series (especially once the production version of the I.D. Crozz goes on sale).

The automaker has an even more ambitious target set for the year 2028, though. By that year, VW wants to sell no fewer than 22-million EVs, and some analysts are wondering whether or not this is an overly ambitious goal. We’ll also have to wait and see if this shift in company policy towards fuel cells will affect Audi’s planned model launch which was not directly alluded to by Diess.

Source: Reuters