UK markets closed

VW plans to make 22 million electric cars in the next ten years

Jill Petzinger
Jill Petzinger, Germany Correspondent, Yahoo Finance UK
Volkswagen CEO Herbert Diess addresses a news conference in Berlin February 27, 2019. Photo: Reuters/Fabrizio Bensch

German carmaker Volkswagen (VOWA.F) announced today (12 March) that it will increase the number of new electric models across the group to 70 by 2028, up from a previous goal of 50.

The company projects that it will produce 22 million electric cars in the next 10 years, up from its previous goal of 15 million.

“Volkswagen will change radically. We are taking on responsibility with regard to the key trends of the future – particularly in connection with climate protection,” said VW CEO Herbert Diess in a statement. 

It is aiming for a fleet CO2 reduction of 30% by 2025, from 2015 levels, which will require an investment of more than €30bn (£25.5bn, $33.7bn) by 2023. It also said today it will cut CO2 emissions at all its plants by 50% by 2025 compared with 2010, as part of its goal to go fully CO2 neutral by 2050.  

The profit margin at its core VW brand fell from 4.2% to 3.8 % last year, as switching to electrification and getting its cars up to the new WLTP emissions standards weighed on the company. The Volkswagen’s group operating profit in 2018 came in at €13.9bn, just 0.7 % up from 2017. 

Handelsblatt reported that Diess is considering a radical savings program for the core VW brand, which could entail getting rid of thousands of white-collar jobs in its home base in Wolfsburg. Like all carmakers in Germany, VW has a strong works council that looks after the rights of employees, and the head of the VW works council, Bernd Osterloh, harshly criticised the company’s management at the weekend.

Speaking to the Braunschweiger Zeitung newspaper, Osterloh said: “Almost two years ago, we pointed out to the board that the introduction of new and modern IT systems will lead to a reduction in a number of indirect areas.” He added that the board expects to reduce its workforce by 5,000 to 7,000 jobs.

Osterloh also said that “that billions have been sunk without consequences,” noting that mismanagement of the new WLTP emissions test standardisation last year along had cost the group “at least one billion euros,”  

VW said in February that it had set a new record for unit sales, at 10.8 million vehicles in 2018. The emissions cheating scandal is still dragging on the carmaker, however, and it paid out €3.2bn in one-off costs linked to the scandal in 2018.

READ MORE: Volkswagen announces it will make its e-car platform available to competitors