VW to go electric-only in Europe from 2033

VOLKSWAGEN is accelerating plans to phase out is internal combustion engine manufacturing operation in Europe to 2033, two years ahead of a previous schedule.

The German giant and joint venture partner Ford will also disband the Argo AI (Artificial Intelligence) autonomous driving technology company as the latter wants to develop partial autonomous driver assistance systems for release in the near term rather than develop fully hands-off driving over a longer timescale, while VW is running a different strategy. 

It remains unclear if the end of internal combustion applies to VW’s 70 manufacturing facilities around the world or only to European production, and if or when brands from the broader Volkswagen Group empire – including Cupra, Ducati, Lamborghini, Porsche, Seat and Skoda – will follow suit.

A carefully worded statement from Volkswagen brand chief operating officer Thomas Schaefer says: “The VW brand division also will launch 10 new electric models by 2026, including an entry-level model that VW wants to sell for less than €25,000 ($A38,603).”

Bentley has already committed to building its last internal combustion engine by 2030.

Automotive News Europe (ANE) reports that Mr Schaefer announced the entry-level EV will have two variants; a hatchback and a crossover. The cars are expected to be badged ID.1 and ID.2.

According to ANE, Mr Schaefer also said VW will bring forward to next year a facelift of the ID.3 compact hatchback, the first of its new generation of full-electric cars, as well as a quasi-SUV version (think Toyota Corolla Cross).

The model will take "a significant and noticeable leap forward in terms of quality, materials and system stability," he said.

Meanwhile, the Argo AI autonomous vehicle technology JV that employs 2000 people is expected to have some of its staff redeployed to Ford and VW will reportedly focus on partnerships with Bosch and Horizon Robotics for development of self-driving systems.

"It’s harder than putting a man on the moon" to create a robo-taxi capable of navigating in a dense urban landscape, said Ford’s chief advanced product development and technology officer,  Doug Field in the ANE report. 

VW Group CEO Oliver Blume said in a statement. "Our goal is to offer our customers the most powerful functions at the earliest possible time and to set up our development as cost-effectively as possible."

VW had planned to introduce a self-driving ride-pooling service in Hamburg by 2025 and eventually provide ride hailing and goods delivery services in Europe and the US.

Ford said in a statement that profitable, fully autonomous vehicles at scale are a long way off and it would take more than five years to see a return on investment.

Despite diverging goals related to autonomous driving, co-operation between Ford and VW continues on electric vehicles in the US and Europe.

For VW, the road to electrification has been plagued by outside influences that have slowed production and in some cases compromised deliveries to customers.

I only achieved its 2020 delivery target for the ID.3 because early production run cars went to customers without some features that were eventually retro-fitted months later.

Heads have rolled at VW including CEO Herbert Diess who was replaced in September by former Porsche boss Oliver Blume. 

ANE reported Mr Schaefer as saying:  “The VW brand will move its production focus from concentrating on a single model per factory to "platform thinking," using the same basic design for different models to allow economies of scale.

Bringing vehicles from different brands into the same factory saves costs, he said: "We have historically a lot of waste in the system we can take out."

Some industry commentators suggest this was a no-brainer and some expressed surprise that a company like VW, which has shared platforms, components and technology liberally between its brands for years, had not already adopted such a plan long ago.

VW will focus on core brands in the next few years and consolidate its product offerings to raise profit margins, which the company wants to be running at eight per cent by 2025.

Mr Schaefer said the key to achieving this with electrification is through improving and standardising battery chemistry and formats, along with producing at scale.

"The only company that can scale in this territory at the moment is us," he told ANE.

"The focus is a clear standard across the brands, and full scale.”