VW Group (Part 1): Annual production capacity of 3.5 million EVs by 2026

Subsidiary PowerCo oversees battery business; CARIAD develops in-vehicle software



VW ID.5 EV SUV coupe launched in May 2022 (Source: VW)

  In April 2021, VW announced its "Way to Zero” decarbonization roadmap. The company aims to become a completely carbon neutral company by 2050, with an interim goal of reducing CO2 emissions per vehicle in Europe by 40% from 2018 levels by 2030. To achieve this, in addition to the transition to EVs, the electricity used in the production and utilization phases must be generated from renewable energy sources. In its five-year investment plan for 2022-2026, the VW Group will allocate 56%, or EUR 89 billion, of its total investment of EUR 159 billion, including capital investment and R&D expenses, to investments in future technologies such as electrification and digitalization. Of this amount, EUR 52 billion will be allocated to EVs, and an annual capacity of 3.5 million EVs is expected to be in place by 2026.

  Regarding electrification, EV sales in 2021 almost doubled from the previous year to 452,900 units, and the share of EVs in total sales expanded from 2.5% to 5.1%. It is expected to expand to 20% by 2025, 25% by 2026, and 50% by 2030.

  In its new EV launch plan, the VW brand will launch the ID.5 SUV coupe and the new ID. Buzz minivan in 2022 and the ID. Aero new sedan in 2023 from the ID. series, a sub-brand of EVs. In 2026, the company will begin production of the Trinity, a next-generation EV sedan that will use a newly developed platform. Audi plans to introduce the A6 e-tron, a midsize sedan, in 2024. SEAT's high-performance brand CUPRA will use VW's electric vehicle platform MEB (Modular electric-drive toolkit) to launch the Tavascan SUV coupe in 2024 and the UrbanRebel urban EV in 2025.

  EV production is carried out in Europe, China, and the United States, and a total of 1.2 million EVs based on the MEB platform are expected to be produced in 2022. In the first half of 2022, MEB plants in Emden and Hanover, Germany, and Chattanooga, USA, were refurbished to increase EV production. For EV battery production, PowerCo SE, a subsidiary, oversees the business. In Europe, the company plans to build six plants by 2030, with construction of the Salzgitter Plant in Germany to begin in 2022 and the Sagunto Plant in Spain to begin in 2023. PowerCo is also engaged in joint development with battery manufacturers and alliances with material manufacturers regarding battery raw materials.

  In the development of autonomous driving technology, the company has jointly developed Level 2 and 3 autonomous driving systems with Robert Bosch GmbH (Bosch). The company has formed a strategic alliance with Mobileye Vision Technology Ltd. (Mobileye) and will use the company's database of high-precision, high-definition (HD) maps. For in-vehicle software, the company plans to increase the rate of in-house production to more than 60% by 2025, mainly through its subsidiary CARIAD SE. CARIAD plans to build a unified and scalable software platform for all VW Group brands, to be launched around 2025. In the area of mobility services, the company acquired Europcar, a major French car rental company, in July 2022. Based on the company's services, it will build a mobility platform for the VW Group.

  For information on VW Group's new model launch plans, movements in the European, Chinese, and U.S. markets, sales volume and performance, and LMC Automotive production forecasts, please refer to the next report in this series, "VW Group (Part 2)."


Related reports:
Carbon Neutral Initiatives at German Automakers' Plants (Oct. 2022)
IAA Mobility 2021: VW and Ford reveal concepts and electric cars focusing on performance (Oct. 2021)
Auto Shanghai 2021: NEVs of Non-Chinese OEMs (Apr. 2021)
VW Group (Part 2): Increasing sales of SUVs and electrified vehicles (Feb. 2021)
VW Group (Part 1): Investing EUR 73 billion in EV, HV and digitalization in 2021-2025 (Jan. 2021)


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