Autonomous Mobility And More: Volkswagen Reveals Its ‘NEW AUTO’ Strategy

• by Martin Punter
• July 14, 2021
• 5 min read

© Credit to Volkswagen

Volkswagen plans to transform itself into a software-driven mobility company “with a strong focus on its powerful brands and global technology platforms.”

• By 2040, all Volkswagen vehicles should emit zero emissions, and by 2050, operate fully climate neutral.
• In the future, Volkswagen intends to reduce costs by using a single universal platform.
• Volkswagen plans to establish a battery supply chain, operating six gigafactories in Europe with a total production capacity of 240 GWh.
• By 2030, the brand will have the systems in place to support autonomous shuttle fleets.

Volkswagen is leaving nothing to chance with its ‘NEW AUTO’ strategy. The goal here is to transform the automaker by investing in battery technology and software-based vehicles that can be updated over-the-air.

“We set ourselves a strategic target to become global market leader in electric vehicles – and we are well on track. Now we are setting new parameters,” said CEO Herbert Dies.

By 2030, the brand hopes to reduce its carbon footprint per car by 30% over its lifecycle. The decade after that (2040) is when nearly all of Volkswagen’s vehicles should emit zero emissions. Moreover, the group intends to operate fully climate neutral by 2050 at the latest.

Volkswagen is preparing itself for a shift in profit/revenue pools as combustion engine cars (ICEs) begin to phase out in place of battery-electric vehicles (BEVs).

The automaker believes that software-enabled sales (accumulating around one-third of sales on top of vehicle sales) could fund Volkswagen’s transition to EVs, thus increasing profit margins.

Investment into new areas has also been secured, with Volkswagen earmarking €73 billion for future technologies through 2025, representing 50% of its total investments.

“We will scale our BEV-platforms, we want to develop a leading automotive software stack. And we will continue to invest in autonomous driving and mobility services. During this transition, our robust ICE business will help to generate the profits and cash flows to do so.”
— Arno Antlitz, CFO of Volkswagen

Universal EV Architecture/Software Platform

The SSP (Scalable Systems Platform) will look to reduce complexity over time as a universal EV platform used for all Volkswagen vehicles in time (by 2026).

Volkswagen will invest around €800 million into a new Research & Development facility in Wolfsburg. This will be where the group designs the core of the SSP platform.

Software, on the other hand, is seen as one of the driving factors steering the automaker forwards. Volkswagen Group’s automotive software company CARIAD aspires to develop the leading software platform by 2025 as one software backbone for all cars under its banner.

Right now, CARIAD is working on three unique software platforms. One, the E³ 1.1, allows for upgrades and over-the-air updates of the MEB product portfolio, such as the Volkswagen ID.4, the Skoda Enyaq or the CUPRA Born.

In 2023, the entity will release the premium software platform 1.2 (E³ 1.2), which will enable a variety of functions, including a new unified infotainment system.

Software stack 2.0 (E³ 2.0) will come with level 4 readiness, meaning drivers can hand the steering over to the vehicle itself.

Controlled Battery Production

Volkswagen has recognised the power electric vehicle batteries will have in the coming shift to eco-friendlier rides. Which is why the brand has established these two pillars under its Technology division:

• “battery cell and system”
• “charging and energy”

Its goal is to establish a controlled battery supply chain by setting up new partnerships and tackling all aspects, from raw material to recycling, thus creating a “closed loop,” as they describe it.

To reach this goal, Volkswagen is looking to reduce complexity — similar to the above-mentioned SSP Platform — by introducing one unified battery cell format with up to 50% cost reduction.

Furthermore, Volkswagen wants to run six gigafactories across Europe with a total production capacity of 240 GWh.

The group also wants to offer customers a “one-stop solution from charging hardware to Energy Management Services.” In other words: build an entire charging/energy eco-system around its vehicles.

Autonomous Opportunities

By 2030, the group hopes to have systems capabilities for autonomous shuttle fleets, owning some of them and expanding its offerings of mobility services and financing.

“Mobility as a service and transport as a service, fully autonomous, will be an integral part of NEW AUTO. The value chain consists of four business areas: the self-driving system, its integration into vehicles, the fleet management and the mobility platform.”

According to Volkswagen, the brand is already at the forefront of development when it comes to self-driving systems thanks to its work alongside strategic partner ARGO AI.

Volkswagen is running pilot projects in Munich to test out this tech and is planning on running similar projects in other parts of Germany, China and the US.

The automaker wants to offer the first autonomous mobility service in Europe in 2025 — followed by the US.

“By the end of the decade, automated driving will completely change the world of mobility. Together with ARGO AI, we are developing an industry leading self-driving system which will enable us to offer completely new mobility services and autonomous transport services. Volkswagen Group is aiming for a significant market share and additional revenue streams in this important future business,” says Christian Senger, CTO of Volkswagen Commercial Vehicles.

This NEW AUTO strategy bodes well for the entire future of the industry should these plans come to pass. What do you think? Could Volkswagen establish a foothold over the market moving forwards?

Martin Punter

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