TOPLINE Volkswagen, one of the world’s largest carmakers, plans to accelerate its transition to electric vehicle production in Europe by 2030, joining an array of other global automakers seeking to move deeper into the electric vehicle market in the coming years to help meet EU emissions targets.
KEY FACTS
- Volkswagen said Friday that it expects all-electric vehicles to account for at least 70% of sales in Europe by 2030 — double its previous target of 35%.
- The automaker’s electric vehicle sales in the U.S. and China are targeted to reach 50% by 2030.
- Volkswagen also said it will invest about $19.1 billion in its electric vehicle programs by 2025.
CRUCIAL QUOTE
“We are stepping up the pace. In the coming years, we will change Volkswagen as never before,” said Ralf Brandstätter, CEO of Volkswagen.
KEY BACKGROUND
The goal to increase electric vehicle production by 2030 matches the mandate by the European Commission, the executive branch of the European Union, to have at least 30 million zero-emission vehicles on European roads by that year as part of its overall campaign to achieve carbon-neutrality in the EU by 2050. About 27% of EU greenhouse gas emissions come from the transport sector, the Commission estimates, adding “The EU’s goal of climate neutrality by 2050 cannot be reached without introducing very ambitious measures to reduce transport’s reliance on fossil fuels.”
WHAT TO WATCH FOR
To achieve its own electric vehicle sales goals, Volkswagen said it will release at least one new electric model car every year. Volkswagen joins a list of global automakers seeking to accelerate their own electric vehicle production goals. Japan’s Toyota, is planning to have 40% of new global vehicle sales be electrified models by 2025 and raise that proportion to 70% by 2030. Last month, Ford Motor said it plans to invest $1 billion in an electric vehicle manufacturing facility in Germany, as part of its goal to sell electric cars exclusively in Europe and the U.K. by 2030. Sweden’s Volvo said last December that it will exclusively make electric vehicles by 2030. General Motors said in late January that it will sell only emission-free vehicles by 2035. IHS Markit, a London-based data provider, said recently that global sales of electric vehicles are estimated to have reached 2.5 million in 2020 and then projected to rise by 70% in 2021. This year, China and Europe will account for 44% and 28%, respectively, of global sales, followed by North America at 16%. In 2025, global sales will exceed 12.2 million, IHS Markit forecast.
BIG NUMBER
$12.2 billion. That’s the profit recorded by Volkwagen in 2020, well ahead of analysts’ expectation of about $5.7 billion, but far below the $23 billion posted in pre-pandemic 2019. Volkswagen’s 2020 performance was boosted by soaring demand for luxury vehicles in China.
TANGENT
Volkswagen faces a fine of more than $119 million this year for failing to meet the European Union’s carbon dioxide emissions targets from its passenger car fleet last year.
FURTHER READING
Best Electric Cars For 2021 (Forbes)
The Moment Of The Electric Vehicle Has Arrived (Forbes)
By Palash Ghosh, Forbes Staff