Volkswagen laid out a far-reaching strategy Thursday to become a leader in the electric vehicle market — with more than 30 new EV models rolling out by 2025 — and is looking at annual sales of 2 million to 3 million units a year, as it tries to recover from a test-cheating scandal.
In a presentation at the company’s Autostadt exhibition center in Wolfsburg, Chief Executive Matthias Mueller announced sweeping changes under a program he called Together-Strategy 2025, as the automaker tries to compete with Tesla Motors, General Motors, BMW, Nissan Motor and others in the clean energy auto market.
Volkswagen will develop its own EV battery technology and realign the components business, which accounted for about 67,000 employees globally, as well as launch a cross-brand mobility solutions business. News reports quoted company officials at Volkswagen’s press briefing saying that reorganization will require more than $11.2 billion in investments by 2025.
Mueller, who took the helm as chairman and CEO at the troubled automaker on Sept. 25, said in the presentation: “This will require us — following the serious setbacks as a result of the diesel issue — to learn from mistakes made, rectify shortcomings and establish a corporate culture that is open, value-driven and rooted in integrity.”
The announcement comes just days after German Deputy Economy Minister Rainer Baake said on Monday that the country needs to develop a fleet of EVs and other emissions-free cars by 2030 to compete globally. In April, Berlin reached a pact with German automakers on $1.4 billion in incentives to boost sales of EVs.
Mercedes Benz parent Daimler said recently that it will roll out a long-distance EV with a 310-mile range at the Paris Motor Show this coming October.
Volkswagen last year admitted it deliberately altered software to cheat on emissions tests in diesel engine models. Nearly 11 million diesel vehicles around the world have engines with the tweaked software. The company earlier this month said it had received approval from a German government agency to recall and repair Volkswagen cars there.
News accounts say Volkswagen has set aside up to $18.1 billion to deal with repairs, legal actions and other matters related to the cheating scandal. The company on May 31 reported a 3.2% drop in revenue in first quarter to $56.8 billion vs. the same period a year earlier, topping estimates. Operating profit rose 3.4% to $3.71 billion, but that doesn’t include China operations.
Also on Thursday, a European Automobile Manufacturers Association report said Volkswagen’s European car registrations rose 8.8% to 321,898 units in May vs. a year before. Ford Motor (F) Europe car registrations were up 7.8% to 87,766 units, the report said. GM’s Opel car European car registrations climbed 12% to 88,298 vehicles in May.
Volkswagen stock plunged 59% from a January 2014 high of 54.88 to a 22.71 low on Oct. 2 before turning up. It’s risen about 24% from that point but fell 1.1% on the stock market today.
Tesla shares closed up 0.1%. GM rose 0.55%, Ford added 0.85%, Daimler gained 1.3%, but Nissan retreated 2.2%.
