Volkswagen Strategy: "Combustion engines are still needed"

Despite the introduction of the next-generation electric platform Trinity and its transformation program "Accelerate 2030," the Volkswagen Group still considers combustion models and plug-in hybrid vehicles indispensable for a while. According to the strategy, the share of electric vehicles in Europe is now expected to double to 70 percent by 2030, compared to the previously targeted quota. In China and the USA, an electric quota of 50 percent is to be achieved by 2030. Not least, an entry-level model priced at around 20,000 Euros, scheduled for 2025, is expected to contribute to this goal. Among other pure BEVs, the all-wheel-drive ID.4 GTX will launch in the first half of 2021, followed in the second half of the year by the more sport-oriented ID.5. In the fall, the ID.6 X / CROZZ, a seven-seater electric SUV for the Chinese market, is set to follow.

Nevertheless, Wolfsburg is keeping an eye on combustion engines and is not committing to a fixed date for phasing out fossil technology, unlike Ford or General Motors, which have at least formally proclaimed an end to combustion engines, albeit with exceptions such as for heavy pickups.

"We still need the combustion engine for a certain time, but as efficiently as possible," said VW brand chief Ralf Brandstätter.

Thus, models like the Golf, Passat, Tiguan, Tayron, and T-Roc are all expected to receive successors as "world cars," and the company also intends to stick to the controversial plug-in hybrid technology. However, the electrical ranges are to increase to up to 100 kilometers, promised the CEO.

Brandstätter fundamentally believes that the shift to electromobility is just the beginning of a tough selection process in the automotive industry, with the digitalization of products and business models imminent. "Volkswagen has the best chance to win the race among all major manufacturers. While competitors are still in the midst of the electric transformation, we are taking significant steps towards digital transformation," says the CEO.

What does this mean?

The VW strategy remains ambivalent: Amid all the hustle around Accelerate 2030 and Trinity, it almost went unnoticed that the VW Group also plans successors for combustion models like the Golf, etc. Considering the timeline, with a lifecycle of 10 to 15 years and a Golf 9 appearing in the mid-2020s, these models will likely have runtimes well into the 2030s. From a climate perspective, this transition is moving far too slowly.

From a customer's standpoint, the question arises: If I can already get an everyday and vacation-ready electric model like the ID.3 or ID.4 today, why should I buy a similarly priced plug-in hybrid with an "old-fashioned" combustion engine that brings numerous disadvantages, such as high fuel consumption on long distances, heavy weight, high operating, and maintenance costs? Considering the rapidly expanding public and private charging infrastructure, lower electricity prices, and decreasing maintenance costs, there will soon be no need to drive a combustion engine that is not future-proof. Even from an economic standpoint, not just an ecological one, this makes sense.

It's quite possible that demand will "overtake" Volkswagen from the right—and combustion engines will become obsolete much faster than currently anticipated in Wolfsburg. The strategy of going "full throttle on electric, but with an emergency brake" seems at least ambivalent, if not somewhat hesitant and "half-heartedly" aligned with CEO Herbert Diess's statement "all-in on electric" in the transformation year of 2021. Is Wolfsburg getting cold feet about its own boldness?