VW Group (Part 2): Investing EUR 60 billion in hybrid, electric and digital in 2020-2024
Alliance with Ford to be extended from LCVs to autonomous driving and electrification
2019/12/17
- Summary
- Medium-term business plan "Together 2025+": confirming financial targets
- Electrification initiative: launching 75 EV models and delivering 26 million EVs through 2029
- Building EVs at 18 plants in Europe, the U.S. and China
- Autonomous driving technology: ending partnership with Aurora, expanding alliance with Ford
- Enhancing development of cloud with Microsoft: increasing in-house software development
- VW to expand WeShare services: Audi to introduce multiple solutions under Audi on Demand brand
- Alliance with Ford to be extended to autonomous driving, EVs and charging network
Summary
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| ID. SPACE VIZZION concept car, the seventh model of ID. family (Source: VW) |
In its medium-term business plan “Together 2025+” revised in June 2019, the VW Group intends to accelerate its transformation and achieve its strategy targets systematically for “shaping mobility – for generations to come”. In particular, the Group will strive for lean Group structure, sharpening brand portfolio to increase the value of the brands, and development of vehicles and services as software products. In November 2019, the Group confirmed its financial targets set out in the business plan. Operating return on sales before special items is expected to be 7-8% and return on investment in the automotive division should exceed 14% by 2025. Capex and R&D cost are anticipated to be 6% of sales revenue from 2020 onward.
According to its investment plan for future technologies altered in November 2019, the VW Group plans to invest nearly EUR 60 billion in hybridization, electric mobility and digitalization for the next five years through 2024 (EUR 44 billion through 2023 in the previous plan). EUR 33 billion of this figure will be spent for electric mobility alone (EUR 30 billion in the previous plan). The 10-year electrification initiative was also modified. Through 2029, the Group plans to launch 75 EV models (70 models through 2028) along with 60 HV models, and deliver 26 million EVs (22 million through 2028) and 6 million HVs.
The VW Group is converting and building plants to implement its plan to produce EVs at 18 plants in Europe, the U.S. and China by 2022. The Zwickau plant in Germany, which was renovated with an investment of EUR 1.2 billion, will be the center of production for EVs using the MEB platform developed by VW exclusively for EVs. SAIC-VW’s Anting plant (Shanghai) and FAW-VW’s Foshan plant in China as well as the Chattanooga plant in the U.S. will be the bases for building MEB-based EVs.
In the field of autonomous driving, the VW Group called off its partnership with Aurora Innovation and invested in Ford’s subsidiary Argo AI. The Group continues to intensify its partnership with Microsoft regarding development of VW’s automotive cloud as the basis for the connected cars. In addition, VW established a software development unit within the company, intending to increase the in-house share of software development. As for mobility services, VW is expanding its car sharing services in Europe and started a subscription business in India. Audi is offering several mobility solutions under the Audi on Demand brand in Europe and an online ride-hailing service in China.
The VW Group and Ford have been expanding their alliance. The two companies agreed to collaborate on engineering and production of light commercial vehicles in January 2019, and extend their alliance to include an autonomous driving technology and electrification plan in July of the same year. VW invested in Ford’s self-driving system development subsidiary, while Ford uses VW’s MEB platform dedicated for EVs. In October, the two companies agreed on a partnership for a charging network in the U.S.
Please refer to Part 1 of this VW Group series regarding sales volume and financial results for the period January-September 2019, outlook for 2019, new model launch plan, Chinese and the U.S. market, and LMC Automotive’s production forecast.
Related Reports:
VW Group (Part 1): Expanding SUV lineup, accelerating NEV offensive in China (Dec. 2019)
German OEM Electrification Strategies, Including EV Product Timelines (Oct. 2019)
Frankfurt Motor Show 2019: European OEMs (Sep. 2019)
VW Group (Part 2): Building EVs at 16 plants worldwide by 2022 (Nov. 2018)
VW Group (Part 1): Reorganizing operations into 7 business units (Nov. 2018)
Medium-term business plan "Together 2025+": confirming financial targets
In June 2019, the VW Group revised its medium-term business plan “Together – Strategy 2025” originally announced in June 2016 and presented a new plan “Together 2025+”. The Group intends to accelerate its transformation and achieve its strategic targets systematically for “shaping mobility - for generations to come”. The new business plan consists of five modules: best governance, best performance, best brand equity, software-enabled car company and excellent leadership. The future challenges include forming a lean Group structure, sharpening the brand portfolio to increase the value of the Group brands, and development of vehicles and services as software products.
The VW Group confirmed financial targets set out in the new business plan “Together 2025+” in November 2019. Operating return on sales before special items is expected to be in line with the previous year level at 6.5-7.5% in 2020. A level of 7-8% is being strived for by 2025. Return on investment in the automotive division is anticipated to be 12-14% from 2020 onward and over 14% starting in 2025. Both capex ratio and R&D cost ratio should be 6% of sales revenue from 2020. Regarding cash in the automotive division, the aim is to achieve net cash flow of at least EUR 10 billion and net liquidity of more than EUR 20 billion by 2020.
VW Group financial targets and actuals (released on November 18, 2019)
| 2017 actual |
2018 actual |
2019 outlook |
2020 targets |
2025 targets |
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|---|---|---|---|---|---|
| Operating return on sales (before special items) | 7.4% | 7.3% | 6.5-7.5% | 6.5-7.5% | 7-8% |
| Return on investment (before special items) (Automotive Division) | 14.4% | 13.1% | 12-14% | 12-14%（Note 3） | ＞14%（Note 3） |
| Capex ratio (Automotive Division) | 6.4% | 6.6% | 6.5-7.0% | 6% | 6% |
| R&D cost ratio (Automotive Division) | 6.7% | 6.8% | 6.5-7.0% | 6% | 6% |
| Cash (Automotive Division) | |||||
| a) Net cash flow (Note 1) （in billions of EUR） |
10.3 | 5.6 | ≧9 | ≧10 | ＞10 |
| b) Net liquidity (Note 2) (in billions of EUR) | 22.4 | 19.4 | ＞15 (Note 3) | ＞20(Note 3) | ~10% of Group turnover |
Source: VW Group Press Release dated November 18, 2019
(Note) 1. Net cash flow is calculated as cash flows from operating activities minus cash flows from investing activities attributable to operating activities. The figures exclude cash outflows in connection with the diesel issues and M&A which amounted to EUR 16.1 billion for 2017 and EUR 5.3 billion for 2018.
2. Net liquidity is the total of cash, cash equivalents, securities, loans to affiliates and joint ventures, and time deposits not financed by third-party borrowings.
3. The figures include the one-off impact of IFRS 16, effective from January 1, 2019, which “recognizes lease liabilities as financial liabilities”.
Electrification initiative: launching 75 EV models and delivering 26 million EVs through 2029
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| ID. ROOMZZ full-size electric SUV |
According to its new environmental mission statement announced in July 2019, the VW Group aims to reduce its total life cycle emissions of vehicles by 30% compared to 2015 by 2025, and become a balance-sheet CO2-neutral company by 2050. The Group is accelerating its development plan for future technologies including electrification to achieve these targets.
The VW Group presented its investment plan for future technologies in November 2019 and announced to invest nearly EUR 60 billion for hybridization, electric mobility and digitalization in the next five years of 2020-2024 (EUR 44 billion through 2023 in the previous plan). EUR 33 billion of this figure will be used for electric mobility alone (EUR 30 billion in the previous plan). The 10-year electrification initiative was also modified. Through 2029, the Group plans to launch 75 EV models (70 models through 2028) along with 60 HV models, and deliver 26 million EVs (22 million through 2028) and 6 million HVs. According to its plan revealed in September 2019, the Group’s projected sales volume of EVs for 2019 will amount to 1% of its total volume. The automaker set ambitious sales targets of 500,000 EVs, accounting for 4% of its total volume, by 2020 and 3 million EVs, amounting to 20% of its total, by 2025.
In November 2019, the VW brand is planning to release seven models for the ID. family, which is a sub-brand exclusively for EVs. All ID. models will be underpinned by the MEB platform developed for EVs by VW. The ID. family include various models ranging from compact cars, SUVs, full-size sedans, microbuses, buggies, and new segment cars integrating a Gran Turismo and an SUV.
In addition to ID. family, the VW brand is launching numerous electrified models such as the e-Golf and e-up! The VW Group’s other brands including Audi, Porsche, Skoda and SEAT are also implementing their own electrification initiatives. Please refer to the report titled “German OEM electrification strategies” released in October 2019 for details of each brand’s plan.
VW Group electrification initiative (revealed in November 2019)
| Investment plan for 2020-2024 | ・The VW Group plans to invest EUR 60 billion for future technologies including electric mobility, hybridization and digitalization (around 40% of a total of capex and R&D cost for the planning period (30% during the previous period)). ・Of EUR 60 billion, EUR 33 billion will be spent for EVs, and EUR 27 billion will be used for HVs and digitalization. |
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| Launch and sales plan for 2020-2029 | ・The VW Group aims to launch 75 EV and 60 HV models. ・The Group is targeting to sell 26 million EVs and 6 million HVs. ・Of 26 million EVs, 20 million EVs will be based on VW’s MEB platform while most of the remaining 6 million EVs will use the PPE platform to be developed by Audi and Porsche for luxury vehicles. |
VW Group’s platforms for EVs
| PPE | Audi and Porsche have been developing the PPE (Premium Platform Electric) for luxury vehicles. The PPE is fitted with an electric motor at the rear axle and another at the front axle. The battery sizes, wheelbase and track width are scalable. Development of the PPE is behind the schedule. The Group is expected to launch the Porsche Macan EV as the first model underpinned by the PPE platform in or after the Spring of 2022. |
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| MEB | The MEB 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, SUVs, large sedans, vans, and even a microcar series such as the ID. Buggy. The MEB offers a range from 330km to 550km depending on battery capacities. In March 2019, the VW Group announced that it would share the MEB with other carmakers to reduce costs significantly. The first company to use the MEB will be e.GO Mobile, a German EV manufacturer. |
| Smaller version of MEB | In March 2019, SEAT revealed plans to develop a smaller version of the MEB platform with VW for vehicles with a length of around 4 m under various brands including SEAT. Using this platform, SEAT aims to develop affordable EVs with an entry level price below EUR 20,000. More than 300 engineers will be participating in this project in Spain. SEAT is developing a platform for the first time. |
VW brand: ID. family models to be launched (all ID. models will be underpinned by the MEB platform)
| ID.3 | The ID.3 is scheduled to be launched in mid-2020. It is equipped with a battery with capacities of 77, 58 or 45 kWh and offers a range of between 330 and 550 km (as per WLTP). Thanks to its fast charging capacity at 100 kW, a range of 290 km can be recharged in 30 minutes. The base price for the ID.3 will be below the EUR 30,000 mark in Germany. Production of the model started at the Zwickau plant in November 2019, and will also begin at the Dresden plant in the fall of 2020. |
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| ID.4 | A compact SUV based on the ID. CROZZ concept car to be released at the end of 2020. This SUV comes with an 83 kWh battery and offers a range of 483 km. Its powertrain delivers a total output of 225 kW. |
| ID. BUZZ | The electric successor to the Microbus expected to go into production in 2022. The model is equipped with a 111 kWh battery and has a range of 435 km. Two electric motors deliver a total output of 275 kW. |
| ID. ROOMZZ | A full-size electric SUV with the first production model to be launched in China in 2021. This SUV comes with an 82 kWh battery and offers a range of 450 km (WLTP). Its all-wheel drive (electric 4Motion) with two motors mounted at the front and rear axle delivers a system output of 225 kW. Combining the IQ.DRIVE systems, the model can drive autonomously (Level 4). |
| ID. VIZZION | A full-size EV sedan to be introduced in Europe in 2022. This sedan is equipped with a 111 kWh battery and offers a range of 708 km. It delivers a system output of 225 kW. It features autonomous driving system and connected function. |
| ID. BUGGY | An EV buggy of which a concept car was unveiled in August 2019. The BUGGY’s modular design allows for the composite upper body to be detached from the chassis, opening up a world of possibilities for custom vehicle production. It comes with a 62 kWh battery and offers a range of 155 miles (approximately 250 km) on the WLTP cycle. |
| ID. SPACE VIZZION | A concept car was unveiled in November 2019, and a production model is scheduled to be launched in Europe, North America and China at the end of 2021. It will be a completely new segment model integrating aerodynamic design of a Gran Turismo and the space of an SUV. It is equipped with an 82 kWh battery. The 4MOTION version delivers a system output of up to 250 kW and accelerates to 100 km/h in 5.4 seconds with a range of 590 km (WLTP). |
Building EVs at 18 plants in Europe, the U.S. and China
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| Chattanooga plant, the U.S. base for EV production |
The VW Group is converting and building plants to produce EVs at its 18 plants in Europe, the U.S. and China by 2022. The Group improved the Zwickau plant in Germany with an investment of EUR 1.2 billion to make it the center of production bases for EVs based on the MEB platform. Production of the ID.3, the first model underpinned by the MEB, started at the plant in November 2019.
In addition to SAIC-VW’s Anting plant and FAW-VW’s Foshan plant that will produce EVs using the MEB platform, JAC-VW’s plant will build other EVs in China. In the U.S., the Group extended the Chattanooga plant with an investment of USD 800 million and will produce MEB-based EVs.
Regarding batteries which are indispensable components for the electrified vehicles, the VW Group set up a battery cell business unit in its components division for development, sourcing, production and recycling of batteries. Also, the Group partners with the Swedish battery producer Northvolt to build a 16 GWh factory in Salzgitter, Germany and produce batteries starting in 2023-2024.
As for other components for electrified vehicles, electric drives for MEB-based EVs for Europe and North America will be produced at the Kassel plant in Germany and those for China will be built at the VW transmission plant in Tianjing. The two plants are expected to produce up to 1.4 million units of electric drives annually from 2023 onward.
EV production plan: building EVs at 18 plants in three continents by 2022 (8 plants to produce MEB-based EVs)
| Europe | Zwickau plant, Germany:The center of production of EVs adopting the MEB platform. With an investment of EUR 1.2 billion, the plant had been converted to an EV production plant. It started mass production of the ID.3 on November 4, 2019. The VW Group will renovate the second assembly line during the summer of 2020 and start operations by the end of the year. It intends to produce six MEB-based EV models under the VW, Audi and SEAT brand. With the annual production capacity of 330,000 units, it will be the largest EV plant in Europe. |
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| Other plants in Germany Dresden plant:Production of the ID.3 will start in the fall of 2020. Emden plant:An EV production line will be added by 2022 to produce the electric SUV models of the ID. family. Hannover plant: An EV production line will be added by 2022. Porsche’s Stuttgart-Zuffenhausen plant:Production of the brand’s first EV Taycan started in September 2019. Porsche’s Leipzig plant:Production of the Macan EV will start from 2020. Audi’s Boellinger Hoefe plant: Production of the e-tron GT performance EV will start in the second half of 2020. Audi’s Ingolstadt and Neckarsulm plants:Production of EVs will start from 2020 onward. |
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| The Czech Republic Skoda’s Bratislava plant:Production of the brand’s first EV CITIGOe iV started in November 2019. Skoda’s Mlada Boleslav plant:Production of EVs will start in 2020. |
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| China | SAIC-VW’s Anting plant in Shanghai:Construction of the Anting plant was completed on November 8, 2019. Chinese joint venture SAIC-VW built the plant which will produce MEB-based EVs with an annual production capacity of 300,000 units. Pilot production of the midsize electric SUV for China based on the ID. CROZZ concept car has started. Its mass production is scheduled to begin in October 2020. In the future, MEB-based EVs under the various brands of the VW Group will be produced at this plant. |
| FAW-VW’s Foshan plant:VW plans to add a new assembly line for MEB-based EVs by 2020. This plant will have an annual production capacity of 300,000 EVs. | |
| EV Joint Venture plant between VW and JAC:According to announcement by the Economic Development Zone of Hefei City, Anhui Province in April 2019, VW and JAC will invest CNY 5.06 billion for construction of an EV plant consisting of workshops for stamping, welding, painting, assembly, and battery pack manufacturing as well as a R&D center and shared facilities. The plant will have an annual production capacity of 100,000 EVs. | |
| USA | Chattanooga plant in the U.S.:This plant will be the VW Group’s North American base for production of EVs from 2022. VW started to extend the Chattanooga plant with an investment of USD 800 million in November 2019. The company will extend a body shop and build a new EV battery pack plant, creating new 1,000 jobs. It will be the first plant to build EVs using VW’s MEB platform in North America. |
| In the U.S., VW will start sales of the first EV model underpinned by the MEB platform in 2020. This will be the ID.4 electric SUV which is a production model of the ID. CROZZ concept car with sales expected to begin in the second half of 2020. Production of the ID.4 will start at the Zwickau plant in Germany and will be transferred to the Chattanooga plant in the beginning of 2022. An electric MPV model based on the ID. BUZZ concept car will also be introduced in the U.S. |
Source: VW Press Release dated September 6, October 28, November 8, 2019
(Note) The VW Group will reveal plans to produce EVs at its multi-brand plants by the end of 2019
VW Group to produce batteries for EVs with Sweden battery producer
| Demand for battery cells | According to the electrification initiative announced in June 2019, VW Group’s annual capacity requirements for battery cells in Europe alone from 2025 are in excess of 150 GWh. Demand on a similar scale is expected in Asia. |
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| Establishing a battery cell business unit | The VW Group has established a battery cell business unit at Volkswagen Group Components. This business unit is designed to provide battery cells for EVs under the Group’s brands in cooperation with suppliers. The spectrum ranges from increasing capacity to extend the range, reducing the use of minor metals, optimizing sustainable manufacturing processes through to recycling battery systems. |
| Building a joint venture factory with Northvolt | In June 2019, the VW Group invested EUR 900 million in joint battery activities with Swedish battery producer Northvolt. The Group invested a part of the fund directly in Northvolt and acquired 20% of its stake. With the remaining fund, the two companies founded a 50:50 joint venture that will start building a 16 GWh battery cell factory in Salzgitter, Germany in 2020. Operation of the plant is scheduled to begin in late 2023/early 2024. 700 jobs are to be created in the medium term in this joint venture. |
| Pilot production of battery cells at Salzgitter plant | The VW Group will set up the Center of Excellence at its Salzgitter plant to develop next-generation battery cells. In September 2019, a pilot line for battery cell production was opened. With an investment of over EUR 100 million, more than 300 experts are involved in developing, testing and piloting innovative manufacturing technologies. |
| Building a recycling line | A battery recycling pilot line is also under construction in Salzgitter and is slated to start operations in 2020. |
Enhancing in-house production of EV components
| Establishing new Volkswagen Group Components brand | The VW Group realigned Volkswagen Group Components as a new brand on January 1, 2019 to reinforce its in-house production of components including engines, gearboxes and electric drive systems. The Group currently has 61 components plants with 80,000 employees throughout the world. The new brand is responsible for five newly organized business areas: engine and foundry, gearbox and electric drive system, chassis, seat, and e-mobility. The automaker plans to invest EUR 3.8 billion in production of e-mobility components by 2023. |
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| EV components for Europe and North America | In Germany, the VW Group produces the MEB platforms and drive shafts at the Wolfsburg plant, battery systems at the Brunswick plant, stators and rotors at the Salzgitter plant, and electric drives integrating these stators and rotors at the Kassel plant. |
| In the future, the Group plans to build electric drives for the MEB-based EVs for Europe and North America at the Kassel plant with an annual production capacity of up to 500,000 units. The Kassel plant will work with the VW transmission Tianjin plant that produces electric drives for China. Together, the two plants will build up to 1.4 million electric drives each year from 2023 onward. | |
| Electric drives for NEVs in China | At the VW transmission plant in Tianjin, China, VW started production of its first APP 290 drive motors (for the VW e-Bora, e-Lavida, and e-Golf as well as the Audi Q2L e-tron) and its first DQ 400e hybrid transmissions (for the PHV versions of the Magotan/Tayron GTE and Tiguan L/Passat) in June 2019. Its annual production capacities for drive motors and hybrid transmissions are 120,000 and 90,000 units, respectively. Production of APP 310 drive motors for MEB-based EVs is scheduled to start from 2020. |
Autonomous driving technology: ending partnership with Aurora, expanding alliance with Ford
The VW Group joined forces with the U.S. autonomous driving start-up Aurora Innovation while Aurora has been seeking alliances with multiple companies, and In June 2019, the VW Group ended its partnership with Aurora. In July, the Group expanded its collaboration with Ford to include autonomous driving field and made an investment in Ford’s autonomous driving technology subsidiary Argo AI. In addition, VW established its own unit within the Group to develop SAE Level 4-capable autonomous driving systems.
VW: calling off its partnership with Aurora, investing in Ford’s subsidiary Argo AI
| Calling off its partnership with Aurora | The VW Group announced that it has ended its partnership with self-driving car software company Aurora Innovation, in June 2019. The Group revealed a strategic partnership with Aurora in January 2018, but Aurora, maintaining its independence, has been seeking collaborations with multiple companies including Hyundai Motor. In June 2019, Aurora announced that it would develop autonomous driving platforms for commercial vehicles with FCA. |
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| Investing in Argo AI | In July 2019, the VW Group revealed that it would invest USD 2.6 billion in Ford’s autonomous driving technology subsidiary Argo AI that focuses on applying a SAE Level 4-capable self-driving system to ride sharing and goods delivery services in urban areas. Ford and VW will have an equal stake in Argo AI, and combined, will own a substantial majority. The two companies will independently integrate Argo AI’s self-driving systems into their own vehicles for sale in the U.S. and Europe. |
| Establishment of autonomous driving technology subsidiary | In October 2019, the VW Group announced the foundation of Volkswagen Autonomy GmbH (VWAT) with headquarters in Munich and Wolfsburg. VWAT aims to introduce its self-driving system into the market by building up know-how within the Group as a development center for autonomous driving above SAE Level 4. Mobility solutions of people and goods in urban areas will be the first application case for the self-driving system from VWAT. The VW Group plans to set up another subsidiary in Silicon Valley, the U.S. in 2020 and a further subsidiary in China in 2021. |
| Testing Level 4-capable automated driving | In April 2019, the VW Group announced that its subsidiary Volkswagen Group Research is testing automated vehicles in urban traffic in Hamburg. This is the first time that the Group has begun to test Level 4-capable automated driving in real driving conditions in a major German city. A fleet of five e-Golf vehicles fitted with laser scanners, cameras, ultrasonic sensors and radar systems are driving on a three-kilometer section of the digital test bed for automated and connected driving in Hamburg. |
Enhancing development of cloud with Microsoft: increasing in-house software development
The VW Group partnered with Microsoft to develop its Automotive Cloud as the basis for connected cars mainly for the European market. In the future, the two companies will extend VW’s Cloud to the U.S. and China. The VW Group also established a new organization for digitalization experts from the fields of software, connectivity, autonomous driving and cloud, and will operate it as an independent business unit starting in early 2020. The Group aims to boost the in-house share of software development from the current figure of less than 10% to at least 60%, and reduce software costs across all its brands by using one uniform software architecture.
VW: enhancing alliance with Microsoft on cloud development, increasing in-house software development
| Strengthening cloud service development with Microsoft | VW and Microsoft (MS) are developing the Volkswagen Automotive Cloud together. VW said in February 2019 that it intends to extend the Volkswagen Automotive Cloud, which has previously been developed mainly for the European market, to the U.S. and China. MS’s Azure cloud platform will continue to form the basis of VW’s Automotive Cloud. It will optimize the links between connected vehicle, cloud-based platform and digital ecosystem. The ID. family model will be the first vehicle to use the Automotive Cloud and is scheduled to be launched in Europe in 2020. Production and sales will follow in China and the U.S. |
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| Independent business unit for software development | In November 2019, the VW Group announced that its “Car.Software” unit with responsibility for development of software in the vehicle will operate as an independent business unit from January 1, 2020. The Group aims to raise the in-house share of software development from the current figure of less than 10% to at least 60% by 2025. In the Car.Software unit, the experts will develop software across the brands in five key areas: connected car and device platform, intelligent body and cockpit, autonomous driving, vehicle motion and energy, and digital business and mobility services. The VW Group plans to invest more than EUR 7 billion in the project through 2025. The company intends to significantly reduce software costs per vehicle across its all brands by using one uniform software architecture. |
VW to expand WeShare services: Audi to introduce multiple solutions under Audi on Demand brand
Regarding mobility services, the VW brand started car sharing services with the e-Golf vehicles in Berlin, and will extend its services to Hamburg and Prague, the Czech Republic in 2020. In India, the VW brand collaborated with a local partner to begin a subscription service using the VW vehicles. Audi launched mobility solutions under the Audi on Demand brand in Europe. In China, Audi partnered with a local company to start a ride-hailing service using the Audi vehicles. SEAT is rolling out corporate car sharing services in Spain.
The VW, Audi and SEAT brands’ mobility services
VW brand
| Launching WeShare service in Berlin | In June 2019, the VW brand has launched WeShare electric car sharing service in Berlin. Initially, the service area of WeShare covers about 150 km2 in the city center and will be expanded in the future. The service started with 1,500 e-Golf vehicles. They are to be followed by 500 e-up! vehicles in the beginning of 2020 and the ID.3 when it is introduced in mid-2020. WeShare service is planned to be extended to Prague, the Czech Republic, together with Skoda, and then to Hamburg, Germany in 2020. |
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| Partnership with Zoomcar in India | In June 2019, VW revealed a partnership with Zoomcar, the largest shared mobility platform in India. Under Zoomcar’s ZAP Subscribe model, potential users can subscribe to a VW Polo at a fixed monthly fee. In the future, VW and Zoomcar intend to offer other VW vehicles. VW will also provide customized financial, maintenance and repair services to Zoomcar. |
Audi
| Multiple mobility solutions under Audi on Demand brand | In May 2019, Audi announced that it would expand its mobility business in Europe and position the umbrella brand “Audi on Demand” on multiple pillars. Starting in the fourth quarter of 2019, customers in ten European countries are able to access around 10,000 Audi vehicles and book them for a flexible period. In addition, customers can access premium models from the partner SIXT, a German leading car-rental company, via the newly developed app or web-portal of Audi on Demand in the future and book them for a flexible duration of between one hour and a year. |
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| Online ride-hailing service in China | In February 2019, FAW-VW-Audi announced that it formed a partnership with Shouqi Limousine & Chauffeur, an online ride-hailing service platform, again and started its ride-hailing service using Audi vehicles in Chengdu, Sichuan Province. Audi’s mobility service has been expanded from Beijing, Sanya and Xi’an and will include the A6L midsize sedan in Chengdu. In the future, FAW-VW-Audi intends to expand its mobility service to more cities in China to meet the needs of high-end mobility. |
SEAT
| Launching corporate car sharing service | In July 2019, SEAT announced that its Respiro subsidiary would roll out a corporate car sharing service. Respiro’s services are offered in Madrid and Barcelona. All the vehicles will be powered with compressed natural gas (CNG) for the corporate car sharing services. |
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Alliance with Ford to be extended to autonomous driving, EVs and charging network
The VW Group and Ford agreed to form a broad alliance in January 2019. Initially, the two companies reached a formal agreement on development and production of light commercial vehicles. Ford will be responsible for engineering and production of medium pickups and larger commercial vans while VW will be in charge of smaller city vans. In July 2019, the two companies agreed to extend their alliance to include autonomous driving technology and electrification. The VW Group will make an investment in Ford’s autonomous driving technology unit. Ford will use VW’s MEB platform designed for EVs. In October of the same year, the two companies also agreed to collaborate with the charging network in the U.S.
Alliance with Ford to be expanded
| LCVs | Ford and VW announced the first formal agreements in a broad alliance on January 15, 2019. Regarding light commercial vehicles (LCVs), Ford will be responsible for medium pickups and larger commercial vans while VW will be in charge of smaller city vans. The two companies delivered a total of approximately 1.2 million units of LCVs in 2018. Demand for medium pickups and commercial vans is expected to grow globally in the next five years. |
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| The two companies confirmed alliance for commercial vans in January 2019. Starting in 2022, Ford will engineer, source and build larger commercial vans (based on the Ford Transit) for European customers for both companies. VW intends to engineer, source and build a city van (based on the VW Transporter) for sale in Europe and other select global markets. | |
| The two companies formed a formal agreement on medium pickups in March 2019. Ford will engineer, source and build medium pickups for both companies (VW Amarok and Ford Ranger) for customers in Europe, Africa, the Middle East, Asia-Pacific and South America. The medium pickups are expected to arrive in key markets as early as 2022. | |
| Autonomous driving technology | In July 2019, the two companies announced to extend their global partnership to the field of autonomous driving technology. VW will invest USD 2.6 billion in Ford’s autonomous driving subsidiary Argo AI by committing USD 1 billion in funding and contributing its USD 1.6 billion Autonomous Intelligent Driving (AID) company. AID is responsible for development of autonomous driving technology in the VW Group. VW and Ford independently plan to integrate Argo AI’s self-driving system into their own vehicles. Argo AI continues to focus on applying its SAE Level 4-capable self-driving systems for ride sharing and goods delivery services in urban areas. |
| EV | The two companies revealed to extend their partnership to the field of EVs in July 2019. Ford will use the MEB platform designed for EVs that VW decided to offer to other companies. Ford plans to launch the first EV model based on the MEB in Europe starting in 2023 and deliver 600,000 units over six years, with a second all-new Ford model for European customers. |
| Charging network | In October 2019, Ford announced an agreement to collaborate with Electrify America, a VW’s subsidiary, to add DC fast charging network to Ford’s charging network for EVs. At a 150 kW charger, customers can add an estimated 47 miles (approximately 75 km) of range in 10 minutes. For longer trips, customers can charge their battery from 10% to 80% in 45 minutes. |
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Keywords:
VW, Audi, Porsche, SEAT, Ford, JAC, Electric, EV, Battery, Northvolt, Autonomous, Connected Car, Software, Microsoft, Mobility, Ride-hailing Service, Car Sharing, Cloud, Ride Share, Zoomcar, Argo AI, Shouqi Limousine & Chauffeur, EU, Germany, China, USA
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