Volkswagen Plans $11 Billion Battery Factory

Humiliated by its diesel emissions cheating scandal and facing billions of dollars in fines, penalties, and civil liability claims, Volkswagen has had an epiphany. Where once it thought turbodiesel engines would propel it to the top of the heap among the world’s automakers, it now has decided battery electric and plug-in hybrid cars are the one true path to salvation.

According to Handelsblatt, Germany’s respected business newspaper, the Volkswagen board will vote on June 22 on a proposal to invest $11 billion in a dedicated battery making factory in Salzgitter where it currently manufacturers internal combustion engines.

The newspaper says VW wants to be independent of the world’s principal battery makers — Panasonic, LG Chem, and Samsung.  It offered no details on what battery chemistry Volkswagen will use to produce its batteries.

Volkswagen’s new head, Matthias Müller, says he and his team are working on a new strategy to dig the company out from under the diesel emissions cheating mess that has left it humiliated and demoralized. The plan calls for producing 1 million electric and plug-in hybrid cars annually by the year 2025. That is 5 years after Elon Musk says Tesla Motors will accomplish the same feat.

The Volkswagen strategy relies heavily on the new MQB modular chassis it has developed for the BUDD-e electric car unveiled at CES in January. The new platform will support both all electric and plug-in hybrid powertrains, allowing Volkswagen to adjust rapidly to changing customer expectations.

The fallout from the diesel cheating scandal has already trimmed the company’s share price by one third. It could cost the company as much as $30 billion to resolve all claims outstanding worldwide as a result of it. Authorities in the US and Korea are still considering possible criminal charges against the company.

Adding an $11 billion investment on top of all that is a bold, even daring move. But the Volkswagen board may believe the company has no other choice if it wishes to claw its way back to the top of the global automobile business.

Source: Quartz  Photo credit: Volkswagen

Germany To Spend Billions Supporting Electric Car Expansion

Smart Fortwo Electric Drive and Mercedes-Benz B-Class Electric Drive at driving school.

Among European nations, Germany is one of the least active when it comes to policies promoting electric cars.

Even as the country's powerful auto industry has turned more attention to plug-in cars, government support for them has been largely limited to political speeches.

But now German Economy Minister Sigmar Gabriel apparently wants to put the government's money where its mouth is.

Gabriel wants to commit 2 billion euros ($2.17 billion) to programs that incentivize electric cars, according to a report in the German newspaper Die Zeit translated by Reuters.

Some of the money would reportedly go to subsidies for the purchase of new electric cars, but no other details were given.

The proposal also calls for expanding the number of public charging stations in Germany, and encouraging government offices to use more electric cars.

2016 BMW i3

Germany currently has 2,400 operational AC charging sites, and around 100 DC fast-charging sites. This will be funded under the current German budget without tax increases Gabriel said. Electric-car incentives have been discussed in Germany before, but so far those discussions haven't translated into much tangible action.

In late 2014, Chancellor Angela Merkel proposed adding tax incentives and cash rebates like those available in other countries, as a way to boost electric-car sales. That same year, legislation was introduced to give electric-car drivers free parking and access to bus lanes. All of these measures have been intended to help Germany meet a goal of putting 1 million plug-in cars on its roads by 2020.

Porsche Mission E concept electric car

To do that, sales will have expand far beyond the roughly 20,000 units recorded in 2014.

Calls for greater emphasis on electric cars intensified with the eruption of the Volkswagen diesel scandal last year. Gabriel--the Economy Minister--and Environment Minister Barbara Hendricks both called for an electric-car quota.

If nothing else, the German car industry--particularly the now-humbled Volkswagen Group--is starting to plan more battery-electric models. Audi will launch and all-electric SUV in 2018, and Porsche has promised to put the Mission E electric-car concept first shown at the 2015 Frankfurt Motor Show into production before the end of the decade.

VW has said it will build an all-electric version of its Phaeton luxury sedan, and is developing a new platform for compact electric cars.

Volkswagen Phaeton Flagship Will Be Electric Tesla Rival

In the wake of the diesel emissions cheating scandal that has already cost the company tens of billions of dollars, VW plans to cut spending on “unessential” new models by as much as $1 billion dollars. What’s most interesting, however, will be something that is being considered essential: an all-electric Phaeton flagship that’s set to rival the Tesla Model S.

When Volkswagen launched the first-generation Phaeton luxury sedan, it had set out to prove that Volkswagen- and not Mercedes-Benz or Rolls Royce- was the world’s innovation and engineering leader. Despite being a market flop in North America before it was discontinued, the $70,000+ Phaeton went on to underpin the hugely successful Bentley Continental and Audi A8, in so doing, going a long way to prove that it really probably was something special.

That’s the past, though. For the future, “the Volkswagen brand is re-positioning itself for the future. We are becoming more efficient, we are giving our product range and our core technologies a new focus,” said VW’s newly-appointed CEO, Dr. Herbert Diess, in a statement that fits neatly with the brand’s move to distance itself from diesel in the US … at least, for the foreseeable future.

You can check out Volkswagen’s official statement on both the company’s future tech, cost-cutting efforts, and the upcoming new Phaeton (again) in the company’s official press release, below.

VW Brand Board of Management Takes Strategic Decisions

---

• Accelerated implementation of the efficiency program creates room for reorientation
• Streamlined processes leverage further cost-saving potential, including cuts in fixed costs
• Product decisions formulated
• New Phaeton will be electric
• New Modular Electric Toolkit planned

The newly-formed Volkswagen Brand Board of Management took further strategic decisions at a special meeting. CEO Dr. Herbert Diess announced major product decisions: a reorientation of the diesel strategy with the most advanced technologies, the development of a standardized electric architecture for passenger cars and light commercial vehicles, and a new approach for the next generation of the Phaeton. Investments are to be reduced by some one billion euros per year, the efficiency program is to be accelerated.
Dr. Herbert Diess underscored: “The Volkswagen brand is re-positioning itself for the future. We are becoming more efficient, we are giving our product range and our core technologies a new focus, and we are creating room for forward-looking technologies by speeding up the efficiency program.”
Reorientation of the diesel strategy
It was decided to switch over to installing only diesel drives with SCR and AdBlue technology in Europe and North America as soon as possible. Diesel vehicles will only be equipped with exhaust emissions systems that use the best environmental technology.
Systematic further development of the Modular Transverse Toolkit (MQB)
There will be a major development thrust for the proven MQB standardized technical toolkit, where Volkswagen Passenger Cars holds responsibility for development within the Group network. The focus is on plug-in hybrids with an even greater range, high-volume electric vehicles with a radius of up to 300 kilometers, a 48-volt power supply system (mild hybrid) as well as ever more efficient diesel, petrol and CNG concepts.
 A new standard with regard to connectivity and driver assistance systems is to be defined.
MEB electric toolkit
An MEB electric toolkit for future use in compact segment vehicles is to be developed based on the experience gained with existing vehicle architectures. This will be a multi-brand toolkit suitable for both passenger cars and light commercial vehicles and will thus leverage synergies from other electric vehicle projects in the Group. The standardized system will be designed for all body structures and vehicle types, thus allowing particularly emotional vehicle concepts, and will enable an all-electric range of 250 to 500 kilometers.
Phaeton redefined – the future is electric
The Volkswagen Phaeton has embodied the brand’s technological competence and brand ambition from the first generation onward. The future generation of the Phaeton will once again be the flagship for the brand’s profile over the next decade. In light of this, the Board of Management redefined the current project. The specification features a pure electric drive with long-distance capability, connectivity and next-generation assistance systems as well as an emotional design.
Accelerated efficiency program
Dr. Herbert Diess said: “We are very aware that we can only implement these innovations for the future of the Volkswagen brand effectively if we succeed with our efficiency program and in giving our product range a new focus.”
Diess continued: “Together with my Board of Management colleagues and the entire team we are working at top speed on these issues. Time and again, the Volkswagen team has proved it stands united and is fully focused on shaping the future, particularly when times are tough. We have now laid the further foundations for that.”

Source: Volkswagen, via Automotive News Europe.