Volkswagen’s Transformation in the Automotive Industry: Investing in Electric Cars and Battery Production

Volkswagen, one of the leading automotive companies, is undergoing a major transformation in response to the rapidly changing industry landscape. The company’s CEO, Blume, acknowledges the challenges and emphasizes the need for adaptation and competitiveness in the long term.

However, despite the need for transformation, Volkswagen’s investment pace is expected to slow down. By 2027, the share of investments is projected to decrease below eleven percent of turnover. This year, investments are planned for 14.5 percent of sales.

Volkswagen has ambitious plans for the future, aiming to have eighty purely battery models by 2030. The majority of these models will be built on the upcoming SSP platform, expected to be launched in 2026. Currently, the MEB platform dominates, which is used for vehicles like the Škoda Enyaq. From 2025, the MEB platform will be supplemented by the improved MEB plus. The charging time for the current MEB platform is approximately 35 minutes from ten to eighty percent, while the MEB plus is expected to reduce it to around twenty minutes. The future SSP platform is projected to offer a charging time of about twelve minutes. Last year, battery electric cars accounted for around eleven percent of Volkswagen’s portfolio, but by 2027, it is expected to increase to forty percent and reach 75 percent by 2030.

Volkswagen is also taking steps to secure the main raw materials needed for its own production of batteries for electric cars. By 2030, the company aims to have secured up to thirty percent of these materials. It estimates a global demand for its own batteries with a capacity of 450 gigawatt hours by 2030. Currently, the demand is at the level of hundreds of GWh, but it is expected to increase to 150 GWh by 2025. To meet this demand, Volkswagen’s main corporate entity, PowerCo, will ensure the construction of gigafactories in Europe and North America.

The company has high hopes for its own single battery cell, which is expected to power up to eighty percent of all its battery cars by 2030. This development is expected to significantly reduce costs compared to the current situation.

The transformation within Volkswagen also extends to its subsidiary, Škoda Auto. The company’s spokesperson, Pavel Jína, states that the future of Škoda Auto is electric. The company aims to satisfy the diverse needs of customers in different regions by offering a portfolio that includes six fully electric models as well as cars with modern combustion engines. This year, Škoda will present modernized models such as Scala and Kamiq, followed by the modernization of the Octavia and the unveiling of the new fully electric model Elroq next year.

In terms of financial goals, the Volkswagen concern aims for a consolidated operating return on sales of eight percent from 2025 for the group of high-volume brands, which includes Škoda, Volkswagen, Seat, and Cupra.

The production strategy for the group of high-volume brands will focus on utilizing plants across brands and platforms more consistently in the future. This means that some electric Škoda cars may be produced outside the Czech Republic, while electric cars from other group brands could be produced in Boleslav.

In terms of financial performance, Volkswagen reported a decrease in profit after tax and operating profit in the first quarter of this year. The decline in profitability was attributed to the “complex international environment,” which included the forced exit from Russia. However, Volkswagen’s sales increased by 21.5 percent to 76.2 billion euros, mainly due to the revival of markets in Europe and North America.

To adapt to the changing market dynamics, Volkswagen is shifting its focus from the East to the West. The company has disclosed plans for the construction of two factories in North America. One factory will produce pick-ups and rugged SUVs of the Scout brand in the USA, while the other will produce batteries for electric cars in Canada.

Overall, Volkswagen is making significant changes to its business strategy to meet the challenges and opportunities presented by the transformation of the automotive industry. The company is investing in electric vehicles, securing raw materials, and streamlining production processes to ensure competitiveness in the long term.

How many charging points does Škoda Auto plan to have in operation by the end of 2025?

Multiple electric models. Škoda Auto plans to introduce ten electric models by 2025, with the Enyaq iV being the first all-electric SUV launched last year. The company is investing heavily in electric vehicle production and aims to have electric cars account for half of its global sales by 2030.

To support its electric vehicle ambitions, Škoda Auto is also expanding its charging infrastructure. The company is collaborating with Ionity, a joint venture between several automakers, to install high-power charging stations across Europe. By the end of 2025, Škoda plans to have around 7,000 charging points in operation, providing convenient charging options for its customers.

In addition, both Volkswagen and Škoda are focusing on digitalization and connectivity in their vehicles. Volkswagen aims to establish a comprehensive software organization, known as Car.Software, to develop in-house software for its vehicles. This move is expected to enhance the customer experience and enable over-the-air updates for future Volkswagen models.

Overall, Volkswagen and its subsidiary Škoda Auto are making significant strides towards a sustainable and electrified future. Through increased investment in electric vehicles, securing raw materials for battery production, and expanding charging infrastructure, the companies are positioning themselves as leaders in the rapidly evolving automotive industry. With ambitious goals for the number of electric models, battery capacity, and market share, Volkswagen and Škoda are ready to adapt to the changing landscape and meet the demands of customers worldwide.