Volkswagen's plan to bounce back? 30 electric car models in 10 years.(Read article summary)
Volkswagen announced Thursday a far-reaching plan to stake the company's future on battery electric vehicles. The automaker aims to sell between 2 million and 3 million of those cars, up to 25 percent of its total vehicle sales.
Roughly a week before the automaker is expected to tell a court how it plans to make amends for lying about cheating diesels, Volkswagen announced Thursday a far-reaching plan to stake the company's future on battery electric vehicles.
Last year, the company admitted millions of diesel cars worldwide illegally skirted emissions laws, which has cost the company tens of billions of dollars already. Volkswagen's then-CEO Martin Winterkorn resigned, executives were fired, and civil—and criminal—cases mounted for the automaker. Thursday's announcement was the latest signal from one of the world's largest automakers that its future will depend heavily on electric car sales.
"This (plan) will require us—following the serious setback as a result of the diesel issue—to learn from mistakes made, rectify shortcomings and establish a corporate culture that is open, value-driven and rooted in integrity," CEO Matthias Müller said in a statement.
Volkswagen Group outlined a plan to build 30 battery-electric vehicle (BEVs) models by 2025 and sell between 2 million and 3 million of those cars, up to 25 percent of its total vehicle sales—which is double its earlier target.
Volkswagen also said it will scale back the automaker's famously ambitious development programs. In 2014, the automaker spent $13.5 billion on research and development—more than any other company on the planet.
"Developing, building and selling vehicles, including the related financial services, will remain essential for the Volkswagen Group going forward. However, the transformation we have initiated today will permanently change the face of our core business, ensuring that we remain a leading player over both the medium and the long term," Müller said in a statement.
The short term may not be so rosy for the automaker.
Next week, Volkswagen is expected to detail in court how it will spend billions to buy back, fix, and compensate owners in the U.S. for illegally polluting diesel cars sold from 2009 to 2015.
The automaker has already shed billions of dollars in value dealing with the scandal and the company's black eye from "Dieselgate" has already forced a significant, and painful, shift for Volkswagen, Audi, Porsche, Skoda and its other brands.
Volkswagen said it would work with its associated union to protect jobs at the automaker, but that the automaker would scale back spending to remain profitable. That may spell potential doom for brands like Ducati and SEAT, as the automaker may look to commercial brands such as Scania and MAN to keep it afloat while it spends more on batteries.