The Volkswagen Group is accelerating its transformation as it seeks to be the leading provider of electric and connected mobility. Top executives announced at its Annual Media Conference this week that it will systematically enhance its platform strategy for future vehicles and services of all its brands through largely standardized technical foundations.

The Group’s new platform roadmap has four elements centered on hardware, software, batteries/charging, and mobility services aimed at reducing complexity, leveraging economies of scale, and creating synergies among brands.

“Electrification and digitalization are changing the vehicle faster and more radically than ever before,” said Dr. Herbert Diess, CEO of Volkswagen AG, during a presentation of the 2020 financial review. “Economies of scale are absolutely critical for both issues. Our platform roadmap will put us in an even better position to tap the full potential of our Group alliance.”

Diess leadership in the effort is being supplemented by other VW AG Board of Management members Murat Aksel, Procurement; Oliver Blume, Brand Group‚ Sport & Luxury; Markus Duesmann, Brand Group, Premium; Gunnar Kilian, Human Resources, and Brand Group, Truck & Bus; Thomas Schmall, Technology; Hiltrud Dorothea Werner, Integrity and Legal Affairs; and Frank Witter, Finance and IT.

 

From MEB and PPE to SSP

In the MEB (Modular Electric Drive Toolkit), VW says it already has one of the most powerful all-electric platforms in the industry, which is now being scaled worldwide with production in Europe, China, and the U.S. By 2022, it plans to have 27 MEB-based models offered throughout the Group.

The VW brand has grouped its MEB-based cars under the ID. label, with the ID.3 and ID.4 now in production, with others to follow. The ID. line was previewed by a series of “showcars” that started in 2016 with the ID., then was followed by the 2017 ID. Buzz, 2018 ID.Crozz, 2018 ID.Vizzion, 2019 ID.Buggy, and 2019 ID.Roomzz.

Volkswagen Motorsport promoted the ID. concept and made the transition to e-mobility from 2018 with the fully electric ID.R racing car. It broke five international speed records with the ID.R, including the overall record for Pikes Peak in the U.S. and the electric record for the Nürburgring North Loop in Germany and Tianmen Mountain in China.

In addition, the Group has launched electric vehicles based on the PPE (Premium Platform Electric) platform in the Porsche Taycan and Audi e-tron GT. As early as next year, the Group plans on launching the first vehicles based on an updated PPE with faster acceleration, higher ranges, and shorter charging times.

However, by the middle of the decade, it wants to launch the SSP (Scalable Systems Platform), the next generation of all-electric, fully digital, and highly scalable vehicle platforms, on which models of all brands and segments can then be built.

For onboard connectivity and software, the Group is aiming to achieve synergies across all brands in the coming years based on the VW.OS operating system supplied by its Car.Software-Org. operation that was established in 2020. Version 1.2 is set to follow in the new PPE, with Version 2.0 rolled out throughout the Group with the SSP. By then, it expects the in-house share of car software development to rise from the current 10% to 60%. Car.Software-Org. is also developing the technical foundations for autonomous driving, data-based business models, and new mobility services.

Another element of the new platform roadmap comprises mobility and other services including the MOIA ride-pooling service, WeShare car sharing, and flexible subscription services from Volkswagen Bank.

“Volkswagen will also be the platform champion in the new world of mobility,” said Diess. “Our roadmap clearly sets out how this will be achieved, allowing us to accelerate our transformation into a software-driven mobility group. We will embark on this journey with a newly configured Board of Management and on a solid financial foundation. Our good performance in 2020, a year dominated by crisis, will give us added momentum.”

In 2020, the Group more than tripled its sales of all-electric vehicles, so its big electric offensive also seems to be working. The Group aims to be the global market leader for electric mobility by 2025, at the latest, by investing around €46 billion in electric and hybrid in the next five years. By 2030, it expects the share of all-electric vehicles in Europe to reach about 60%.

 

Power Day

The platform strategy was headlined by batteries and charging earlier this week at the Group’s first Power Day. The goal of its technology roadmap is to significantly reduce the complexity and cost of batteries to make electric cars attractive and viable for as many people as possible.

The Group is aiming to secure the supply of battery cells. It wants to “secure a long-term pole position in the race for the best battery and best customer experience in the age of zero-emission mobility,” said Diess.

In Europe, it is planning six “gigafactories” with a total production capacity of 240 GW·h by 2030. It is also pursuing expansion of the public fast-charging network globally, with agreements in Europe with BP in Great Britain, Iberdrola in Spain, and Enel in Italy.

Cross-brand responsibility for the technology roadmap will lie with Volkswagen Group Components led by Schmall, Member of the Board of Management of Volkswagen Group for Technology, and CEO of Volkswagen Group Components.

The first two factories will operate in Skellefteå, Sweden, and Salzgitter, Germany. In response to increased demand, VW will produce its premium cells in Skellefteå with Northvolt. Production there is set to commence in 2023, expanding gradually to an annual capacity of up to 40 GW·h. The Salzgitter operation will produce unified cells at up to 40 GW·h per year for high-volume segments from 2025 and develop process, design, and chemistry innovations. Both gigafactories will be powered with electricity from renewable energy sources.

 

The unified cell from 2023  

VW is expecting to make significant advances with the battery system including its own cells and other components.

“We aim to reduce the cost and complexity of the battery and at the same time increase its range and performance,” said Schmall. “This will finally make e-mobility affordable and the dominant drive technology.”

Aside from the planned in-house production, significant cost benefits are expected primarily thanks to the new prismatic (vs. cylindrical and pouch) unified cell. It is set to be launched in 2023 and will be installed across brands in up to 80% of all the electric vehicles in the Group in 2030.

Savings will be delivered by optimizing the cell type, deploying innovative production methods, and employing consistent recycling. VW is aiming to gradually reduce battery costs in the entry-level segment by up to 50% and in the volume segment by up to 30%.

“On average, we will drive down the cost of battery systems to significantly below €100 per kilowatt-hour,” said Schmall.

The Group’s new technology roadmap will also focus on integrating more steps along the value chain. In addition to cost benefits, advances in storage capacity and fast-charging capability are expected. The new unified cell is said to offer the best transition to the solid-state cell, the next quantum leap in battery technology that the company anticipates for the middle of the decade.

 

Charging ahead

Along with its partners, the company intends to operate about 18,000 public fast-charging points in Europe by 2025. That represents a five-fold expansion of the current fast-charging network and corresponds to about one-third of the total demand predicted on the continent for 2025.

In addition to its Ionity joint venture (with BMW Group, Ford Motor Co., Hyundai Motor Group, and Mercedes-Benz AG), VW wants to establish about 8000 fast-charging points throughout Europe with BP. With a charging capacity of 150 kW, the points will be installed at 4000 BP and Aral service stations, with the majority of these in Germany and Great Britain. The cooperation with Iberdrola will cover the main traffic routes in Spain. In Italy, the collaboration with Enel will establish a fast-charging network along motorways and in urban areas. VW will invest about €400 million in the European program by 2025, with further investments from the partners.

The company also is expanding the public fast-charging network elsewhere, with Electrify America planning around 3500 fast-charging points in North America by the end of the year. In China, it is targeting a total of 17,000 fast-charging points by 2025 through the CAMS New Energy Technology Co. Ltd. joint venture.

VW intends to integrate the electric car into private, commercial, and public energy systems in the future. This will allow green electricity from the solar energy system to be stored in the vehicle and fed back into the network if needed. The Group says it will enable customers to be more independent of the public power grid, while also saving money and reducing CO2 emissions.

Vehicles based on the MEB platform will support this technology from 2022. VW will offer a package with modules and digital services from the bidirectional wall box to energy management. The technology will also be used on a larger scale, for example in residential buildings, businesses, and in other more general power grid applications.