20 Nov 17

VW invests €22.8bn to ‘future-proof’ global plants

E-mobility is key in Volkswagen’s ‘Transform 2025+’ strategy. With the electric I.D. sub brand, it wants to become the number one builder of EVs over the coming years. But it needs to convert its plants worldwide to accommodate this transition, which encompasses enhanced modularisation.

Therefore, it is investing €22.8 billion between 2018 and 2022, €14 billion of which in factories located in its home country. Zwickau becomes the beating heart of VW's electric models. Conventional models will be relocated, overseas plants get new market-specific projects.

Largest product and technology offensive

Herbert Diess, CEO of the Volkswagen brand, explains: "The investment package (…) will give a decisive boost to the largest product and technology offensive in the history of the brand. It is our objective to position Volkswagen sustainably in the lead in the volume segments and to take up a leading position in e-mobility."

Logically, VW’s native Germany will receive the lion’s share of the investment package. The Zwickau plant (some 50 km to the south of Leipzig) is to be converted in an EV-only factory. Indeed, this is where the three I.D. models – a Golf-sized, Tiguan-sized and Transporter-sized EV – will be produced. The first model is set for launch in 2020, simultaneously in Europe, China and the USA.

Electric at the price of diesel

It is VW’s firm intention to offer its electric I.D. models at prices of comparable diesel-powered vehicles. Depending on the battery, VW’s EVs should get you between 400 and 600 km from home when they are fully charged. The OEM emphasizes the short time need to 'top them up', without specifying further.

This democratic prise setting should help VW reach its 100,000-unit target for the launching year – a number that the carmaker expects to grow to more than 1 million by 2025. Regarding the supply of an EV’s single most expensive part – its battery: VW is calling other OEMs to join them and create a European joint-venture to compete with Asian suppliers such as LG Chem, Panasonic and Samsung.

Relocation of conventional models

The future Golf and Passat will no longer be built in Zwickau, but in VW’s hometown Wolfsburg and Emden, respectively. Furthermore, vehicle production plants throughout the world such as those in Pamplona (Spain), Palmela (Portugal) and Bratislava (Slovakia) are preparing to produce further MQB-platform vehicles.

USA, Mexico, South America and Russia are to develop “market-oriented SUV projects”, the press release reads. As regards the future of the German components plants, Volkswagen is investing over €750 million in Brunswick, €1.5 billion in Kassel and more than €800 million in Emden.

Authored by: Dieter Quartier