VW Cutting Models, Powertrain Combos To Accelerate EV Investment

DEC 9 2018 BY C SMITH 51

The automaker wants “around 20” electric cars on the road by 2025.

Volkswagen is the latest manufacturer to announce an “acceleration” to previously established restructuring plans. In this case, the automaker isn’t talking about layoffs, at least not yet. Instead, VW plans to drastically reduce powertrain configurations for the European market. As a consequence, some models will likely disappear as well.

We’d love to share specific information on what this entails, but VW doesn’t have anything more to offer at this time. In a press release (available below), the company explained that engine/transmission combinations with low demand will be cut in the forthcoming model year. Furthermore, the release goes on to say the cut should have “corresponding positive effects on the complexity of production and the supply chain.” We interpret that as meaning fewer powertrain options will lead to fewer models, thereby simplifying the process. Also, VW opens its announcement by straight-up saying its model portfolio would be streamlined.

“We must force the pace of our transformation and become more efficient and agile,” said Ralf Brandstätter, VW’s chief operating officer. “We cannot let up in our efforts and must realize further substantial improvements. What we have achieved so far is still not enough.”

, and it will take a significant technological investment to get there. In fact, VW’s plan calls for investments over $12.5 billion (€11 billion) in e-mobility, digitalization, autonomous driving, and mobility services. More than $10.2B (€9B) of that is directed solely at electrification, so yeah, the company is looking to spend a lot of cash in the very near future. Dropping low-selling powertrain combos and models will help, and though there’s isn’t a specific mention of job cuts or layoffs, the release does say that “administration processes will become even leaner.”

Both General Motors and Ford have made headlines recently for similar circumstances. GM is poised to lay off 15 percent of its salaried workers, and similar layoffs could be in store at the Blue Oval.

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51 Comments on "VW Cutting Models, Powertrain Combos To Accelerate EV Investment"

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VW- Talking Head:’..”What we have achieved so far is still not enough.”
You will get no argument from me on that specific point.

Gotta love it when Truth is Spoken to Power!

For all the good it does. I would amend my original statement to add, that in other areas, not related to evs directly,
but in the cheating software arena, VW has done more than enough.

The kicker here is that all the big exec types copy everyone else’s bad ideas. VW says they’re releasing 20 vehicles, GM is releasing 20 ‘electrified’ (what ever that means) vehicles – but privately, they’re probably mostly for CHINA where they have to make them. GM figures they can talk nonsensical baloney since VW has been doing it for years.

Wouldn’t surprise me at all if they (GM) stopped making ANY electrics for the states after BOLT ev sales fall through the basement when the tax credit ends.

It’s not privately at all. Mary Barra gave a speech and press release related to those plans specifically saying they will use traditional truck and SUV profits in North America to fund their transition to EVs largely focused on China. Which makes sense as China is the largest global auto market in the world, and will be the largest EV market. From a business perspective, why wouldn’t you start there?

There are other concerns here. The US taxpayers, and the province of Ontario Canada and the Federal Gov’t of Canada had the tacit understanding with GM that they were being bailed out to save jobs IN THE COUNTRY that bailed them out. It is rather dirty pool to accept all those monies and then abandon the people who made it possible. They even haven’t paid back the loans to Canada yet fully. This is why UNIFOR head Jerry Dias called what GM did a betrayal.

You have a right to your own opinion of course, but Politicians on all sides of the political spectrum disagree with you.
You would think Mary Barra, among others would not be so tone-deaf. There are actions to be taken to improve her hearing.

Why should GM do any business in Canada when Ontario stops its EV subsidies? Serves them right.

Well… maybe Tesla will ask the Ontarians to kick the subsidies up to get access to buy that Oshawa ONT factory. They picked up Nummi for 40 mil… who knows what a factory in Oshawa would be worth if GM can’t keep its investment going. Wonder what it would do to tariffs for cars or components shipped through there to China or Europe?

Tacit understanding are worth nada without written contracts with teeth (like bonds that would be forfeited if GM doesn’t employ X people in Canada through date Y at an average salary of Z).
Just one example why IMO GM should have been allowed to go down for good and not bailed out.

Regarding GM yet to make ‘electrified’ (which means plug-in hybrid or fully electric) in China

Baojun E-100 EV
(Baojun is a partnership between GM and a Chinese company).

VELITE 6 EV fully-electric
VELITE 6 PHEV
Regal PHEV
Velite 5 PHEV

Are any of them being sold? All I could find on Google is they displayed at auto shows in China?

They have sold 20k-30k of the Baojun E100 and launched the E200 back in September.

The Velite 5 is basically a rebadged Volt. And they are for sale in China.

The Velite 6 was supposed to go into production this past summer but they ran into quality issues with the local battery supplier (A123), so its been postponed till they sort it out.

You are unique in holding that opinion.

Most of these will be “48 V mild hybrids” that use a 48V Lithium battery and a small motor to get the car moving and to recapture breaking energy (plus be able to run accessories). This will replace the stupid start/stop systems in place today. The cost is fairly low to put this in place and the result is a dramatic increase in city efficiency and lower pollution.

Tesla was the vanguard. VW is the massive army coming behind it to force and accelerate the wholesale conversion to EVs.

If that were the case, why wouldn’t the e-Golf be sold in every country like the LEAF is, and use that platform to gauge the EV interest? Until they get going on a big way, it’s all just a lot of fluffy talk.
So far only a few companies have committed to EV’s in a big way. Most just have compliance cars to satisfy regulations, and I think VW will be no different as they look to satisfy China and future rules about using ICE in large cities.

VW has proven to be dishonest. It’s likely they are being dishonest about their EV ambitions. They are trying to appear to comply with various court rulings related to diesel gate, as well as make the public and German government think they are transitioning to produce EV’s in any appreciable number.

If they are being dishonest about their electrical ambitious, they are sure losing a ton of money in battery contracts and development research for nothing. They built the e-golf partially to gauge public opinion, partially for research and partially to comply with government regulations but the many new EVs models based on their new electrical architecture represent a big investment. I think it’s fair to assume they’re serious about their commitment to EVs. I understand the lasting resentment toward VW for their unconscionable decisions regarding dieselgate but I wish them success in helping the world transition to electric transportation.

The e-Golf was a compliance car. But we don’t live in a static world. Things change and in a few years we will know. The other big manufacturers can ignore Tesla ( for a while at least ) but they won’t be able to ignore a heavyweight like VW.

The e-golf IS a compliance car. VW has no other electric models available, nor will they any time soon. The Model Y will be available long before, and if, VW releases even one decent electric vehicle.

Define “anytime soon”. The ID goes into production in 2019 as a 2020 model year.

They also sell the e-Up! in Europe, as well as the Golf GTE PHEV (and until very recently, the Passat GTE as well).
That said, the productions numbers for all of those are low; by all accounts, the MEB platform is the main effort, so we’ll see how strongly they push that.

Good luck getting anyone here to recognise markets beyond the US. Everything is a “compliance car” unless there’s one on every corner in 50 states, regardless of how popular it might be anywhere else in the world.

The e-golf is the second most sold car in Norway this year, and fifth in Europe. More than Tesla’s models.

VW also have e-Up available, and the Golf GTE and the Passat GTE (not anymore).

Becuase the e-Golf is a conversion compliance car, and Tesla has shown that to have a successful product you really need an EV designed to be an EV.

Not always. The Kona EV already looks like a success, and it’s a conversion (granted, Hyundai needs to fix the battery production bottleneck & up the volumes).

But is it? I understood the Kona was designed from the start with ICE, PHEV and BEV versions in mind.

Regarding the EV revolution, VW keeps ramping up the volume on talking the talk. But they have yet to show they’re walking the walk.

I certainly hope the recent blizzard of PR coming from VW indicates a real commitment to shifting production to make EVs in high volume. But VW’s 10+ year history of vaporware EVs gives us every reason to demand actual evidence for what they’re claiming. More claims piled on top of so many false claims… isn’t convincing.

Does “VW” mean “Volkswagen” or does it mean “VaporWare”?

VW = Verboten Wunderkind

M not sure how investing billions to acquire battery supplies, and beginning to convert factories to EV production, and developing the Porsche Taycan, and the Audi e-Tron is not walking the walk?

People always said they wouldn’t believe an automaker until they start eating into their ICE models to transition to EVs. Now that GM and VW are doing just that, people still don’t buy it. They can’t just wish billions of dollars into existence to fund the effort. So, they are freeing up cash. I personally think this another positive sign that VW is serious.

100 percent agree but you must realize half the poster and some writers have no desire to see reality or any understanding of corporations…

I think the GMs layoffs and factory closures are their prelude to greatly increased BEVs…
And may the Volt and PHEVs RIP their day is done…

The country is ripe for a recession. Haven’t had one since the big one. The tax cut may have postponed it a year or so. GM is closing factories now that it would probably close when the next recession occurs. As bad as it looks, they may actually be looking at the future instead of the quarterly P/L statement. I wonder how quickly can transition back to cars if gas prices jump and consumers shift from SUV’s and trucks to fuel efficient cars.

They won’t need to transition to cars, they have been taking a lot of weight out of their trucks and SUVs and developing hybrid and PHEV drivetrains they can put it in.

Normally I wouldn’t discuss politics but by “the big one” do you mean the recession of 2008? That was pretty severe and painful for many of us.
Additionally the recent “tax cut” gave stockholders a nice dividend but did nothing for the general health and well-being of the industry or the workers that depend on that industry. Indeed that particular corporate handout may have hastened and intensified a possible recession.
GM cutting some of the bloated models that were no longer selling was painful for those building those dinosaurs but one made necessary by poor choices by their management. Hopefully they’ll make some better choices in the future.

What are you talking about? What VW is eating into ICE sales. What GM is eating into ICE sales?

You don’t see the negative statements that Leaf is not shipping electric cars, because it is – we complain about the TMS but not that they are not shipping.

Likewise the I-Pace, it clearly is shipping TODAY, and again we don’t post that it is hot air because we can see the shipments. We complain about the range, but we don’t claim it is not available.

But VW and GM talk the talk year after year instead of making BEVs. And talk talk Bolt, I went to my local GM Dealer and he told be I have to wait a year to get a Bolt. That is not trying to sell cars.

They closed several ICE car plants to free up money to make BEVs. What don’t you get about that?

Put that in perspective, how long have people been waiting for a $35,000 model 3 ?

Different issue as no one can doubt that an ev based company wants to sell evs. It just wants to order the process in a way that allows it to make money on all sales, meaning it needs to realise greater efficiencies of production first.

It doesn’t mater what they want, it matters what they do as opposed to what they promised. And no company delivers less than promised like Tesla.

You’re not paying attention. Tesla products always exceed their own specifications and everyone’s expectations. They are usually many months to years late, but they have consistently overdelivered results.

Unless you’re really upset by production delays, you cannot say, with fact, that Tesla “delivers less than promised”.

Es precisely it is about getting seriously behind volume productiion. So in rhe case of vw not just producing the taycan and etron etc. but seriously trying to sell it and to ensure that demand for it can be satusfied within a reasonable time.

There is another 800 lb. (364 kg, for our metric friends) gorilla in the room that this forum doesn’t discuss very often: what would happen to the budgets of those countries, who heavily rely on predatory car- and gasoline/diesel taxes to finance welfare handouts and public projects, including EV subsidies?

This is a US-based publication. Unless those from other countries provide accurate information in comments, none of us here have any idea how any other country pays for its services.

VW is spending quite a bit on their ‘MEB’ platform–sort of a VW version of the Kona. They are planning to build a lot of car models (up to 27!) built on this platform–and will even allow other car companies to use the platform for their electric cars. (They are also working on a performance SPE platform).

I withhold judgement until their first MEB cars come out.

The eGolf is really a minor distraction from what they have coming, if they can pull it off. I’m rooting for them.

The sting for VWG is engine assembly takes place in its back yard. Foreign car assembly is common (to avoid tariffs, etc), but many German jobs are in power train.

I wonder how much development and R&D Bugattis halo cars cost VAG ,is that division even profitable?

I read multiple times and recently again that Bugatti is not profitable. I do not know why it is still alive. To please overpaid people and princes of oil countries ? It doesn’t even serve to develop technologies for the other brands of the Volkswagen group (no downsizing, not even a bit of hybridation in any Bugatti).

The worst being that most of these cars are not even driven and barely brake the thousand miles threshold in years. For me this brand today has no reason to exist.

Standard move, make what sells.

Do Not Read Between The Lines

I’d bet VW are cutting engine combinations because of WLTP, not because of EV.

The EV van could be sold for local deliveries, see where it goes from there.