As electric cars bump petrol-guzzlers off the road, VW culls workforce

Jeannie Matthews
March 15, 2019

The company said this will allow it to attain its objective of selling 22 million vehicles powered by electricity and built on its new MEB platform within a decade.

Last year, Volkswagen revealed the scope of its commitment to electric powertrains, announcing the most expansive plan in the industry; one that would see it get in front of the pack in terms of sales in this emergent sector, with 50 new electric auto models planned. That was ambitious in itself, given that it made fewer than 50,000 battery-only vehicles past year.

The company also plans to emulate Tesla in the way it will be building its future vehicles. Results were hit by delivery bottlenecks caused by Europe's new WLTP emissions testing cycle and big investments in electric vehicles.

Transitioning to a fully electric production line will likely be an expensive endeavor for the company. "VW is evolving from carmaker to software company". Most other carmakers that lack VW's capacity have opted to build electric vehicles that work in conjunction with their now combustion models.

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After Zwickau, Volkswagen will roll out production of electric vehicles to seven other factories worldwide including two plants in China and a factory in Chattanooga, United States, VW said. The move will likely be a big gamble for the company, which is now suffering from strained revenues caused by high expenditure on electric drivetrain technologies.

Chief Financial Officer Arno Antlitz acknowledged that while the company has "higher goals" that reflect its superior scale compared with smaller, more profitable rivals such as PSA Group, VW was sticking to the 6% target "in the midterm" as the cost for the looming industry transformation weighs on earnings. In 2017, the VW Group announced a gradual transition from combustion engine to BEVs. VW is spending 44 billion euros (US$49 billion) through 2023 on electric and connected cars.

The original plan was to introduce the new model in September at the Frankfurt Motor Show, but that won't be the case anymore. This includes the recently unveiled Porsche Taycan and the Audi E-Tron.

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