VW Group (Part 2): Building EVs at 16 plants worldwide by 2022

Partnerships with Aurora, NVIDIA and Apple on autonomous driving technology

2018/11/16

Summary

Q8
Audi’s flagship SUV Q8 (Photo: Audi)

As part of its medium-term business plan “Together - Strategy 2025” released in June 2016, the VW Group has been advancing electrification, promoting SUVs, developing mobility services, and reducing capital expenditures and R&D costs. As a result of these efforts the Group achieved record profitability in 2017. Upcoming tasks include resolving the diesel crisis, cost reduction, compliance with stricter emissions regulations, and improving the profitability of mobility services.

The VW Group has shifted to electrification following the diesel emissions scandal and released its strategy entitled “Roadmap E” in the fall of 2017. This strategy intends to launch 50 EV and 30 PHV models by 2025. According to its production plan for electrified vehicles unveiled in March 2018, the Group will build EVs at 16 plants in Europe, China and the U.S. by 2022. The Group is contracting with battery manufacturers to procure the necessary batteries for each region.

To offer sustainable mobility, the VW Group plans to invest EUR 34 billion in electrification, digitalization, autonomous driving technologies and mobility services through 2022. In 2018, the Group partnered with Aurora Innovation, NVIDIA and Apple on autonomous driving technologies. In the area of connected cars, VW partnered with Microsoft, agreeing to use its cloud services.

In its new model launch plan, the VW Group will continue its SUV offensive in Europe, China and North America. In the premium car segment, Audi introduced the Q8 flagship SUV and the Q3 compact SUV in 2018. In the volume car segment, the VW brand released the new Touareg flagship SUV and the all-new T-Cross. In addition, the VW brand plans to launch the all-new Tharu and Tayron SUVs exclusively for China.


Also, please refer to Part 1 of this VW Group series regarding the VW Group’s reorganization of its operations, the spin-off of its truck and bus division, its partnership with Hino Motors, sales volumes and financial results for the first half of 2018, outlook for 2018 full-year business results, and LMC Automotive’s sales forecast.

 

Related reports:
VW Group (Part 1): Reorganizing operations into 7 business units (Nov. 2018)



Together - Strategy 2025: business plan results and future direction

The VW Group has been striving to enhance its SUV lineup, promote electrification, construct mobility services, and reduce capital expenditures and R&D costs in line with its medium-term business plan “Together – Strategy 2025” announced in June 2016. With the implementation of such a systematic strategy, the Group achieved record profitability in 2017 despite the continuing effect of the diesel crisis.

Future tasks for the Group include resolving the diesel issue, improving the profitability of its operations in North America, South America and Russia, cost reduction, compliance to strengthening emissions regulations, and developing profitable mobility services.

 

VW Group financial targets and actuals (Note 1)

2016
actual
2017
actual
2018
outlook
2019
target
2020
target
Operating return on sales (before special items) 6.7% 7.4% 6.5-7.5% 6.5-7.5% 7-8%
Return on investment (Automotive Division before special items) 13.9% 14.4% 12-14% 13-15% > 15%
Capex ratio (Automotive Division) 6.9% 6.4% 6.5-7% 6% 6%
R&D cost ratio (Automotive Division) 7.3% 6.7% 6.5-7% 6% 6%
Cash (Automotive Division)
a) Net cash flow (Note 2) (in billions of EUR) 7.2 10.1 ≧ 9 ≧ 10 > 10
b) Net liquidity (Note 3) (in billions of EUR) 27.2 22.4 > 20 > 20 ~ 10% of Group turnover

Source: VW Presentation Handout Analyst Meetings 2018.9.5, Half-Yearly Financial Report (Jan.-Jun. 2018)
(Note) 1. As of August 1, 2018. (The VW Group confirmed the 2018 outlook for its operating return on sales (before special items) when it reported its business results for the third quarter on October 30, 2018.)
2. Net cash flow is calculated as cash flows from operating activities less cash flows from investing activities. The figures exclude cash outflows in connection with the diesel crisis which amounted to EUR 3 billion for 2016, EUR 16.1 billion for 2017 and EUR 2.6 billion for the first half of 2018
3. Net liquidity is the total of cash, cash equivalents, securities, loans and time deposits not financed by third-party borrowings

 

Upfront tasks

Continue to resolve the diesel crisis Conclude worldwide recall campaigns and service actions
Manage legal proceedings worldwide
Improving the core business Profitability in North America, South America, and Russia
Drive future pact for VW brand further (reduction in workforce)
Cash generation and capex, and R&D discipline
Transformation towards more e-mobility CO2 compliance, and WLTP implementation
Profitability of electric vehicles
Governance, compliance, and culture
Strengthen innovation power Digitalization & connectivity
Profitable mobility services

Source: VW Presentation Handout Analyst Meetings 2018.9.5



”Roadmap E” electrification initiative: building EVs at 16 plants worldwide by 2022

VW ID. シリーズのシャシー
The chassis for the VW ID. family (based on MEB platform)
(Photo: VW)

As one of the most important challenges in “Together – Strategy 2025”, the VW Group launched the comprehensive electrification initiative “Roadmap E” in the fall of 2017. Along the initiative, the Group plans to launch new 50 EV and 30 PHV models from its brands and sell two to three million electric vehicles annually by 2025. According to its production plan released in March 2018, the VW Group will build EVs at 16 plants in Europe, China and the U.S. by the end of 2022. The Group plans to procure batteries, which are core components for EVs, from South Korea’s LG Chem and Samsung SDI, and China’s CATL as well as QuantumScape in the U.S.

Among the VW Group’s platforms for the EVs, the PPE (Premium Platform Electric) is designed for luxury vehicles produced by Audi and Porsche, while the MEB modular platform is used for volume production cars under the brands of VW, Audi, Skoda and SEAT. The MEB underpins a range of vehicles including compact cars, sedans, SUVs and MPVs. The first model to be based on the MEB will be the VW I.D. compact hatchback to be launched in 2020. The I.D. CROZZ, and an SUV variant of the VW I.D. series of electric cars also will be released in 2020, while the I.D.BUZZ, a microbus version, will be launched in 2022. Audi unveiled the Audi e-tron, the brand’s first electric SUV, in September 2018. In 2019, Porsche plans to launch the Taycan, an electric sports car which was developed based on the Mission E concept car.

The VW Group is also developing fuel cell vehicle (FCV) and CNG technologies to comply with stricter emissions regulations. In 2018, Audi and Hyundai Motor signed an agreement to jointly develop FCV technology. Audi plans to launch the small scale production of FCVs in the early 2020s. SEAT is responsible for the development of CNG technology for the VW Group.

 

VW Group “Roadmap E” electrification initiative (revealed in the fall of 2017)

2018 - In addition to the existing eight EVs and PHVs, the VW Group will launch another nine new electrified vehicles in 2018 (three of which are pure EVs).
2025 - The VW Group intends to add 50 EV and 30 PHV models throughout its brand family.
- The Group is targeting to sell two to three million units, or 20-25% of the Group sales, of purely electric-powered vehicles.
- The Group needs battery capacity in excel of 150 GWh per year through 2025 just to equip its own fleet.
- MEB: EUR 50 billion in battery cell procurement by 2025, of which EUR 40 billion has been already awarded to suppliers.
2030 - At least one electric version will be offered for each of the VW Group’s 300 or so models.

 

Electric vehicles to be launched

Audi e-tron Audi brand’s first purely electric SUV was announced in September 2018. This model is equipped with a battery with a capacity of 95 kWh and powered by two drive motors: the front motor delivers a maximum output of 125 kW and the rear motor 140 kW. The vehicle’s range in WLTP mode is more than 400 km.
Porsche Taycan A fully electric sports car to be launched in the second half of 2019. Porsche will invest up to EUR 500 million for the development of its variants. The Taycan is based on the Mission E concept car.
VW I.D. The VW I.D. compact hatchback EV is the first model of the VW brand’s new I.D. series of EVs, and the first to adopt the MEB platform for electric vehicles. The model is scheduled to be launched in the beginning of 2020.
VW I.D. CROZZ An electric SUV based on the VW Group’s MEB platform, which is scheduled to be released in 2020.
VW I.D. BUZZ An electric microbus based on the VW Group’s MEB platform, which is scheduled to be released in 2022.
VW e-Crafter A large electric commercial van scheduled to be released in 2019. This van uses a motor with a maximum output of 100 kW and a battery with a capacity of 35.8 kWh. It has a range of 107 miles and a top speed of 56 mph.
SEAT brand’s first EV This EV is scheduled to go on sale in 2020. It adopts the VW Group’s MEB platform architecture and has a range of 500 km.

 

EV production and battery procurement plans (released in March 2018)

EV production plan In March 2018, the VW Group announced plans to produce EVs at 16 of its plants in Europe, China and the U.S. by the end of 2022. In Europe, in addition to the plants in Germany and Slovakia, the Group will build EVs in Eastern European countries such as the Czech Republic and Poland. In China, the Group’s five plants will manufacture EVs, while in the U.S., the EVs will be built at its Tennessee plant. It currently produces EVs at three locations and plans an additional nine Group plants to be added within the next two years.
The e-Golf, so far VW’s only EV on the market, is produced at two plant locations in Wolfsburg and Dresden, Germany. In 2019, VW’s Zwickau plant in Germany, will be converted to a pure EV plant with an annual production capacity of 330,000 units starting with the I.D. hatchback and I.D. Crozz crossover.
Battery procurement (for Europe and China) Regarding batteries, a core component of EVs, the VW Group has entered into battery supply agreements worth EUR 20 billion in total with South Korea’s LG Chem and Samsung SDI, as well as China’s Contemporary Amperex Technology Ltd (CATL). CATL plans to launch a new low-cobalt NCM811 battery with high energy density designed for EVs in 2019. The VW I.D. is expected to adopt this battery. CATL will invest EUR 240 million to build a battery plant at Erfurt in Thuringia, Germany. This plant will start production in 2021 and is scheduled to supply batteries to various automakers including VW.
Battery procurement (for the U.S.) On September 13, 2018, the VW Group announced an investment of USD 100 million in QuantumScape, a US-based battery manufacturer, thus becoming its largest automotive industry related shareholder. VW will have a seat on the board of directors of QuantumScape. The two companies will establish a joint venture to develop and produce solid-state batteries and build a production line for these batteries by 2025. QuantumScape holds over 200 patents and patent applications for solid-state battery cell technology.

 

Audi and Hyundai Motor partner in fuel cell technology

On June 20, 2018, Audi and Hyundai Motor Group announced that they have entered into a multi-year cross-licensing agreement for their existing and future patents regarding fuel cell vehicle (FCV) components and technologies. This agreement also allows Kia Motors and Audi’s parent company, VW, to share the patent licenses. As a first step, Hyundai Motor will grant Audi the access to FCV parts that are based on Hyundai’s know-how accumulated to develop the ix35 Fuel Cell and NEXO vehicles.
Hyundai Motor has been selling mass produced hydrogen-powered SUVs since 2013 and currently sells the model in 18 countries. Audi is responsible for the development of fuel cell technology in the VW Group and will be able to take full advantage of Hyundai’s FCV parts supply chain including Hyundai Mobis. Audi plans to release the small scale production of an SUV fuel cell model in the early 2020s. Audi will continue to develop FCVs, while minimizing development costs by adopting Hyundai Motor’s fuel cell technology.

 

SEAT will develop CNG technology for VW Group

SEAT has positioned itself as the brand of reference in VW Group’s CNG strategy. The SEAT Technical Center, which employs more than 1,000 engineers, will develop CNG technology for the VW Group. SEAT plans to offer a CNG version of the Arona, which will be the world’s first CNG-powered SUV, by the end of 2018. Furthermore, SEAT is working with several partners to build 300 CNG stations in Spain by 2020. Together with an industrial consortium including gas companies and other partners, the VW Group aims to bring about a tenfold increase in the number of CNG vehicles registered in Germany to one million units by 2025.


Collaboration with Aurora, NVIDIA and Apple in autonomous driving technology

The VW Group has partnered with Aurora Innovation, the U.S. startup founded by the expert who used to lead Google’s self-driving car project and the engineer who was in charge of Tesla’s Autopilot development program. The two companies plan to integrate Aurora’s technology into VW’s vehicles to use them for mobility services. Furthermore, the Group will cooperate with NVIDIA on AI technology and will work with Apple to develop a self-driving van for use as an Apple employee shuttle.

 

Collaboration with Aurora Innovation, NVIDIA and Apple in autonomous driving technology

Collaboration with Aurora Innovation In January 2018, the VW Group announced a strategic alliance partnership with Aurora Innovation, a leading self-driving technology company in the U.S. The collaboration brings the two companies together to realize Mobility-as-a-Service for self-driving EVs in urban areas. Over the past six months, specialists from the VW Group, the Volkswagen Automotive Innovation Lab (VAIL) at Stanford University, and Aurora have already been working to integrate Aurora’s self-driving system into the VW Group’s vehicle platforms. The system includes elements such as sensors, hardware and software, machine learning and AI technology.
Infusing NVIDIA’s AI systems On January 8, 2018, VW announced that it will adopt NVIDIA’s AI system into its next-generation model lineup. AI technology for autonomous driving will be integrated in the new I.D. BUZZ, a rebirth of the VW Microbus. By introducing NVIDIA’s AI system technology, features such as facial recognition, driver alerts for bicycles, gesture recognition, natural language understanding for voice control, and driver distraction alerts are possible.
Partnership with Apple in development of self-driving van According to several media sources on May 23, 2018, VW and Apple signed a deal to develop an electric self-driving vehicle to be used as a shuttle between two office buildings for Apple employees. The VW T6 van will be converted into an electric self-driving vehicle at the plant of VW’s subsidiary in Italy. While retaining the orighinal frames and chassis of the T6, Apple will replace many of the parts including the dashboard and seats, and add sensors and a battery pack. Apple reportedly failed to reach an agreement for self-driving cars with BMW and Mercedes-Benz because the technology company allegedly was being required to relinquish control of the management of related data and design information.


Alliance with Microsoft on the cloud as the base of connected cars

The VW Group plans to invest EUR 34 billion in electrification, digitalization, autonomous driving, and mobility services by the end of 2022. The VW Passenger Car brand assumes that, from 2020, new VW vehicles will be fully connected, thereby enhancing its car sharing and mobility services. The VW Group entered into partnership with Microsoft regarding cloud services for connected cars, which will be based on Microsoft’s Azure cloud platform.

 

Partnership with Microsoft in regard to cloud-based services for connected cars

On September 28, 2018, the VW Group announced a strategic partnership with Microsoft (MS) to develop a cloud-based platform. The Group will use MS’s Azure cloud platform for its connected cars. The VW Passenger Car brand has been developing Volkswagen Automotive Cloud which can cater to more than five million new connected cars annually. VW and MS will join forces to develop the basic technologies for the cloud. VW will set up a development office near MS’s headquarters in the state of Washington in the U.S. VW is working to accelerate the VW Group’s digitalization through the strategic partnership with MS.


Expanding ride-sharing business by MOIA subsidiary

Regarding the mobility services business, MOIA, a subsidiary of the VW Group, will expand its ride-sharing business using minivans, with plans to launch the service in Hamburg at the end of 2018. The VW brand started electric car-sharing services in August 2018. SEAT will enter the car-sharing business with the acquisition of a car-sharing startup based in Spain.

 

MOIA to start ride-sharing service in Hamburg at the end of 2018

MOIA, a mobility service subsidiary of VW established in December 2016, has been road testing its ride-sharing shuttle service using minivans in Hannover since December 2017. Approximately 2,000 test users access MOIA’s service fleet consisting of 20 VW T6 minivans via a smartphone app. The MOIA vehicle is a battery-powered minivan that seats six which is fully connected, with a range of more than 300 km. MOIA plans to start its commercial ride-sharing service in Hamburg at the end of 2018, using 200 minivans, and expand the service to other cities by 2020.

 

VW brand to launch EV car sharing service “We Share”

On August 23, 2018, the VW brand announced that it will launch its all-electric car sharing service “We Share”. The service will start in Berlin, Germany, in the second quarter of 2019, using 1,500 units of the e-Golf and later, an additional 500 units of the e-up. These vehicles will gradually be replaced by models from the VW I.D. family after 2020. Following the launch in Berlin, “We Share” will be rolled out to other major cities in Germany. After 2020, the VW brand plans to expand the service into selected cities with a population of over one million in Europe and North America.

 

SEAT brand acquires the car-sharing startup Respiro

On February 15, 2018, SEAT announced that it acquired Respiro, a car-sharing startup based in Madrid, Spain. This is the first time for SEAT to enter the car-sharing market. Respiro, established in 2010, generated sales revenue of EUR 1.8 million in 2016. The company is renting cars by the hour to 15,000 users with a fleet of 200 vehicles.


New model launch plan: expanding and renewing its SUV lineup

Kamiq
Skoda Kamiq, a new SUV designed for China (Photo: Skoda)

The VW Group will continue to expand and renew its SUV lineup in both the luxury and volume car segments. In the luxury car segment, Audi will launch the Q8 flagship SUV and the new Q3 compact SUV. The Lamborghini brand released its first SUV, the Urus. Among the volume car brands, VW plans to expand its SUV lineup to more than 30 models by 2025. In 2018, the brand launched the all-new T-Cross following the launch of the new Touareg luxury SUV. In 2018, the Skoda brand released the Karoq and Kamiq, both compact SUVs for China, and the Kodiaq, a large SUV for Russia. The SEAT brand will introduce the Tarraco midsize SUV and the Cupra Ateca compact SUV at the end of 2018.

 

VW Group new model launch plan in luxury car segment (2018)

Audi brand

New A7 Sportback A five-door hatchback coupe launched in Germany in February 2018. This model comes with a 3.0-liter V6 turbocharged engine. It features a 48V mild hybrid system as standard equipment.
Q8 A full-size crossover SUV, and Audi’s flagship model. This model features both the elegance of a luxury coupe as well as the versatility of a large SUV. It was launched in Europe in the third quarter of 2018. It comes with a 3.0-liter V6 twin-turbocharged engine. A 48V mild hybrid system is offered as standard equipment on all models.
New A6 Avant A premium wagon that debuted in the Paris Motor Show held in October 2018. The body of the new wagon is larger than the outgoing model. Its cargo storage capacity is 565 liters, which can be increased to 1,680 liters with the rear seats folded. It features a 48V mild hybrid system.
New Q3 A compact crossover SUV launched in Europe in November 2018. A sibling of the VW Tiguan. The powertrain of the model for Europe is available as a 1.5-liter I3 gasoline, 2.0-liter I4 gasoline, or 2.0-liter I4 diesel engine. All the engines feature direct injection and a turbocharger. The new Q3 is produced at the Gyorl plant in Hungary.
Q2 LWB
(China)
A long-wheelbase version of the Q2 urban premium SUV. This SUV was launched in Chengdu, China in October 2018. It comes with a 1.4T PSI engine mated to a seven-speed S tronic DCT. It is produced at FAW-VW’s East China plant. Prices range from CNY 226,800 to 281,800.
New A1 Sportback The second-generation model of the Audi A1 underpinned by the MQB A0 platform. Its body and cabin space are larger than the outgoing model. The trunk space is increased by 65 liters. The base model in Germany is priced at less than EUR 20,000.

 

Lamborghini brand

New Aventador S Roadster A roadster super sports car. This model is powered by a 6.5-liter V12 engine. It accelerates to 100 km/h in 3.0 seconds and has a top speed of 350 km/h.
Urus The Lamborghini brand’s first SUV. It comes with a 4.0-liter V8 turbocharged engine. It accelerates to 100 km/h in 3.6 seconds and has a top speed of 305 km/h.
New Huracan Performante Spyder An open-top super sports car. It is equipped with a 5.2-liter V10 engine. It accelerates to 100 km/h in 3.1 seconds and has a top speed of 325 km/h.

 

VW Group new model launch plan in volume car segment (2018-2020)

VW brand

Virtus
(South America)
Launched in Brazil in February 2018, this new midsize sedan was developed for the Latin American market. The sedan is equipped with a voice recognition system which uses AI technology, a technology first for Latin America. It is produced at the Anchieta plant in Sao Bernardo do Compo, Sao Paulo.
New Touareg The third-generation model of the midsize premium SUV. This SUV was unveiled in March 2018. Its body was enlarged while its weight was reduced by 106 kg. In Europe, the model was initially introduced with a V6 diesel engine. Afterwards, for other markets, a V6 gasoline engine and a V8 turbocharged diesel engine variants were also made available. A PHV version is offered for China.
New Jetta
(U.S.)
A compact sedan launched in the U.S. in May 2018. Based on the MQB platform, its wheelbase is extended by 3.3 cm compared to the previous model, resulting in a larger cabin. The Jetta comes with a 1.4-liter I4 turbocharged engine, which delivers 147 hp and 184 lb-ft of torque, the highest level for its segment. It is produced at the Puebla plant in Mexico.
New Lavida
(China)
A sedan released by SAIC-VW in the second quarter of 2018. The best-selling model in the sedan/hatchback category in China. Based on the MQB platform, it comes with a 1.5-liter EA211 or the new 1.4-liter TSI engine.
New Bora
(China)
A compact sedan. This model comes with a 1.4-liter 4-cylinder turbocharged engine or 1.5-liter 4-cylinder engine. It is produced at FAW-VW’s East China plant.
T-Roc LWB
(China)
A compact SUV which is targeted at young people and features competitive pricing and functionality. This SUV is produced at FAW-VW’s South China plant. It is based on the MQB A1 platform. Prices range from CNY 139,800 to 209,800.
T-Cross A compact SUV unveiled in October 2018. This SUV is based on the MQB platform. It is produced in Spain, China and South America and will be gradually launched in global markets.
Tharu
(China)
A compact crossover SUV positioned under the Tiguan. It was unveiled in Beijing in March 2018 as the Powerful Family SUV. The model will be produced at SAIC-VW’s plant and go on sale by the end of 2018.
Tayron
(China)
A midsize SUV launched in October 2018. This SUV is targeted at people who were born in 1980s and 1990s. It is based on the MQB platform and produced at FAW-VW’s North China plant. Prices range from CNY 188,800 to 319,800.
New Passat
(U.S.)
A midsize sedan which is scheduled to be launched in the U.S. in 2019. It will be produced at the Chattanooga Plant in Tennessee.
Arteon (U.S.) / CC (China) A four-door coupe which succeeds the CC and is positioned above the Passat. This model was released in the US in the third quarter of 2018. It comes with a 2.0-liter 4-cylinder turbocharged engine. In China, it went on sale in August 2018 as the CC. The model is equipped with a 2.0-liter 4-cylinder turbocharged engine.

 

Skoda brand

Karoq LWB
(China)
A five-seat compact SUV released in March 2018. This SUV is produced at SAIC-VW’s Ningbo plant. It is equipped with a 1.2- or 1.4-liter 4-cylinder turbocharged engine.
Kodiaq
(Russia)
A seven-seat SUV launched in Russia in June 2018. This SUV comes with a 2.0-liter diesel engine which delivers 150 ps and 340 Nm of torque. It is produced at GAZ Group’s Nizhny Novgorod plant.
Kamiq
(China)
A compact SUV developed for China. This SUV was released in June 2018. It comes with a 1.5-liter EA211 engine mated to a Tiptronic automatic transmission. Prices range from CNY 120,000 to 140,000.

 

SEAT brand

Tarraco A midsize crossover SUV to be launched at the end of 2018. This SUV is based on the VW Group’s MQB platform. It is produced at the Wolfsburg plant in Germany.
Cupra Ateca A compact crossover SUV to be released at the end of 2018. This SUV is equipped with a 2.0-liter turbocharged gasoline engine which delivers 300 ps. It accelerates to 100 km/h in 5.4 seconds and has a top speed of 245 km/h.
New Leon A 5-door model and an ST family size version are scheduled to be launched in 2019.
SEAT’s first CUV The SEAT brand’s first Cross Utility Vehicle (CUV) is planned to be introduced in 2020.


China: VW Group continues the introduction of NEVs and SUV offensive

VW Tiguan L PHEV
VW Tiguan L PHEV for China (Photo: VW)

The government of China plans to introduce regulations requiring that sales of new energy vehicles (NEVs) reach a threshold equivalent to 10% of an automaker’s total sales in 2019 and 12% in 2020. In response to the new policy, the VW Group is implementing its electrification plan in China. The Group will invest EUR 15 billion in electrification, digitalization, and other advanced technologies by the end of 2022. It has plans to start building EVs at six plants in China by 2021 and sell 1.5 million zero emission vehicles in the country by 2025.

In its new model launch plan for China, the VW Group is continuing its SUV offensive to meet the growing demand for these utility vehicles. The VW brand intends to expand its SUV lineup from the existing six to twelve models by 2020. The Audi brand will launch six new SUVs in the next two to three years. The Skoda brand will introduce three new SUVs in 2018. In order to support the introduction of NEVs and continue the SUV offensive, FAW-VW has launched four new plants and VW’s joint venture with JAC has set up a new NEV plant in 2018. In addition, SAIC-VW has begun building an EV plant that is scheduled to start operations in 2020.

 

VW Group to sell 1.5 million zero emission cars in China by 2025

On April 24, 2018, the VW Group announced that, with its joint venture partners, it will invest EUR 15 billion in electrification, autonomous driving technology, digitalization and mobility services in China by the end of 2022. The Group plans to start producing EVs at six plants in China by 2021. Along its Roadmap E electrification initiative, it will launch 40 new NEV models in the country in the next seven to eight years.
The VW Group China will be prepared to deliver around 1.5 million zero emission cars to Chinese customers by 2025. In phase 1, VW will introduce locally produced NEVs, and offer PHVs based on the current platforms. In phase 2, EVs will be based on the current platforms, and in phase 3 (starting in 2020/2021), VW will introduce EVs based on scalable electric platforms. Affordable NEVs will be produced by JAC-VW, the joint venture with JAC.

 

New NEV models for China

VW Tiguan L PHEV Launched in September 2018, this model has an overall range of 862 km and an all-electric range of 52 km. With an output of 155 kW and 400 Nm of torque, it hasa top speed of 200 km/h and can accelerate to 100 km/h in 8.1 seconds.
JAC-VW SOL E20X An electric compact SUV, which is the first production model under the new SOL brand for JAC-VW’s NEVs, was unveiled in April 2018. This SUV has a range of 300 km (NEDC mode) and features a voice recognition system based on AI technology as well as an intelligent connectivity system.
VW e-Golf This model has been imported and sold since March 2018 with a price of CNY 268,000. It’s energy consumption is 13.6 kWh/100 km. It has a top speed of 150 km/h and can accelerate to 100 km/h in 9.6 seconds.
Audi e-tron The Audi brand’s first all-electric SUV will be imported and go on sale in 2019. This SUV is scheduled to be locally produced starting in 2020.

 

FAW-VW opens four new plants to support SUV offensive and NEV introduction

North China (Tianjin) plant This plant was opened in August 2018 with an annual production capacity of 300,000 units. The total investment amount was CNY 19,486 million. The plant is scheduled to produce VW and Audi brand vehicles and started assembly of the Tayron (Chinese name: Tanyue), a new SUV, in September 2018.
East China (Qingdao) plant This plant started operations on May 28, 2018 with an annual production capacity of 300,000 units. It produces the new Bora and two Audi models based on the MQB platform. In the future, it plans to assemble ICE vehicles and EVs on the same line. It will also produce MQB battery systems. An overall amount of CNY 10 billion will be invested in the Qingdao plant through 2020.
South China (Foshan) plant This is a new plant which was added in the second phase of construction for the South China plant. The total investment amount was CNY 15.3 billion. An inauguration ceremony to celebrate the start of production was held in June 2018. The new plant has an annual production capacity of 300,000 units, doubling the South China plant’s capacity to 600,000 units. It produces new SUV models under the VW and Audi brands and will electrify vehicles based on the MQB platform. By 2020, the MEB platform will be introduced to the assembly line, alongside the production of MEB battery systems.
Audi Q plant in Changchun This plant started operations in March 2018 with an annual production capacity of 300,000 units. The investment amount was CNY 15.8 billion. It produces a long-wheelbase version of the Audi Q5L midsize SUV.

 

New NEV plants in China

JAC-VW’s Heifei plant This is a plant of JAC-VW, a joint venture between Anhui Jianghuai Automobile (JAC) and VW. It has an annual production capacity of 100,000 units. A line-off ceremony for the E20X (an electric compact SUV), the first production model of the SOL brand, was held on May 25, 2018. The plant produces JAC-VW’s NEVs under the new SOL brand.
SAIC-VW’s EV plant On October 19, 2018, SAIC-VW started construction of a new plant to be used exclusively for the manufacture of EVs in Shanghai. With an investment amount of CNY 17 billion, it plans to start operations in 2020 with an annual production capacity of 300,000 units. It will initially assemble the VW brand’s SUVs followed by vehicles under the Audi and Skoda brand. It will produce various EVs including compact and large vehicles based on the MEB, the VW Group’s all electric modular platform.


In China, Audi agreed to produce and sell its vehicles with SAIC Motor, while maintaining its existing partnership with FAW. SEAT will acquire a stake in JAC-VW to be the VW Group’s lead brand in the joint venture project.

 

Audi acquires a stake in SAIC-VW and starts production and sales with SAIC

In June 2018, Audi announced that it acquired a 1% stake in the SAIC-VW joint venture and started production and sales with SAIC Motor. Audi agreed to produce and sell cars with SAIC in 2016, but that idea was halted by opposition from its existing partner, FAW. It is presumed that Audi has since reached an agreement that allows them to partner with SAIC while maintaining its ties with FAW.

 

SEAT to acquire a stake in JAC-VW and enter Chinese market

SEAT announced that it signed a MOU with VW China and JAC in July 2018. SEAT will acquire a stake in JAC-VW to be the VW Group’s lead brand in the joint venture project and plans to enter the Chinese market in the 2020-2021 timeframe. The three companies will establish an R&D center in China by the end of 2021 to develop EVs, connectivity, and autonomous driving technology including related components and core technologies. In addition, JAC-VW will launch a competitive EV platform by combining resources from the three companies.


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Keywords
VW, Audi, Porsche, Skoda, Together - Strategy 2025, Roadmap E, MEB, electrification, EV, PHV, autonomous driving, mobility, connected car, cloud, ride sharing, car sharing, Aurora, NVIDIA, Apple, Microsoft, MOIA, China, NEV, SUV, Taycan, Q8, e-tron, I.D.

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