Things are not going as well as expected for Volkswagen in terms of electrificationwhich is why it is modifying its plans, investing again in combustion cars and launching others to regain ground and make things more difficult for Chinese brands.
Having greater control over the electric car value chain is part of the plans of the Volkswagen GroupTo achieve this, it will use its own battery factories, among other things. One of them will soon open its doors in Germany.
Volkswagen Group wants to create its own electric car ecosystem
One of the keys to the expansion of the Chinese electric car is that Chinese manufacturers control the entire electric car value chain. They exploit the mines to obtain the raw materials needed to make the batteries, which are manufactured in their own factories. gigafactorieslike the rest of the car, and distribute them around the world via their own ships.
The production model of European manufacturers is not the same and they are highly dependent on all kinds of suppliers, but that is changing. Little by little, traditional companies are building their own battery factories in Europe and are moving production away from China so as not to be left (further) behind in the race for electric cars.
At the same time, Europe is tightening its protectionist policies, so it makes more sense than ever for local manufacturers to produce their electric cars and the components that go into them here. In doing so, they will reduce their dependence on Asian suppliers, especially when it comes to batteries, since CATL and BYD, both Chinese, are the two largest manufacturers in the world.
It is crucial to stand up to Chinese manufacturers and to save face after following strategies for years that are not working out entirely well. A good example is the Volkswagen Group; The German company is not dealing with electrification in an exemplary manner, and it is not that it does not have experience manufacturing electric cars because it has been selling them for years, but its plans are not going as planned, so its managers are being forced to rethink some things and make decisions to clean up the accounts, such as reducing its production capacity.
After the electric Volkswagen Up! and Volkswagen e-Golf, Volkswagen intended to take a giant step in terms of electrification with its new Volkswagen ID range. The first to arrive was the Volkswagen ID.3, which was intended to be the Volkswagen Golf of the electric era, but the reality has been quite different and the electric compact has not sold too well. Nor have the rest of the models in the ID. range that have been arriving until now.
Meanwhile, Chinese cars are selling better and better, both in Europe and globally. As Volkswagen is not willing to be left behind any longer, it is going to put some plans in place; one of them is to launch cheap electric carsbut really cheap, not like the Volkswagen ID.3. In this way, it aims to reach a wider audience and compete head-to-head with cheap Chinese electric cars and those being launched by its European rivals.
Volkswagen’s first affordable electric car will be the Volkswagen ID.2. We should be getting to know it in a few months and it is expected to land in dealerships sometime next year; around the same time, other Volkswagen Group brands will launch similar models that will share the platform, technology and approach with the ID.2, such as the Cupra Raval and the Skoda Epiq, the latter in SUV format.
In addition to this plan to launch cheap electric cars, there is the construction of gigafactories to produce their own batteries. One of them will be in Spain, specifically in Sagunto, another in Canada and the third in Germany; the latter, located in Salzgitter, will be the first to be launched and will do so very soon.
These plants will be the work of the new battery division of the Volkswagen Group, called PowerCoThe initial objective was to invest more than 20 billion euros, a sales potential of 20 billion euros and the creation of 20,000 jobs in Europe.
PowerCo started construction of the gigafactory Salzgitter In July 2022 and at the end of this year, Volkswagen should begin to shape its own electric car ecosystem.
From Salzgitter, Volkswagen will manage the operations of the international plants, the development of cell technology, the vertical integration of the value chain and the supply of machinery and equipment to the plants. Looking ahead, Volkswagen says it has other products planned, such as large storage systems for the energy grid.
However, for a while, Volkswagen will continue to depend on third parties, such as Hyundai, which will also manufacture the batteries for Volkswagen’s electric cars in Spain, and China, which will be key to solving its software problems. The aim is to reduce this dependency as much as possible in the medium term.
In any case, Volkswagen’s plans will be subject to what happens, and that means that if demand for electric cars is not as expected, as is happening now, the German group will have to modify its strategy again, like many other manufacturers.
Find your ideal electric car
If you’ve thought about buying an electric car, this will interest you. We have created the Personalised Electric Car Recommender, where, in addition to seeing the models that suit your needs, you will also have answers to the questions that may concern you the most, such as price, range or nearby charging points.
Image | Volkswagen
Source: www.motorpasion.com
