VW's $ 50 billion bet on electric vehicles

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VW's $ 50 billion bet on electric vehicles

ID.3, which will enter the dealer network in 2020, is the first of a total of about 70 electric cars that the concern is preparing.

At a big motor show, Volkswagen AG usually presents itself as one big, happy family, in which every member - be it Seat, Skoda, VW, Audi, Porsche, Lamborghini or Bugatti - gets equal time with the others to present their news. But not during the Frankfurt show in September, where the whole press conference was dedicated to a single model: the electric hatchback ID.3. There was no other model of the booth at the brand.

As journalists and industry professionals gathered in the hall, footage of green mountains flowing on large video walls, birds chirping happily. The lights went out and a trio of ID.3s appeared on stage. To viewers Herbert Dies said: "This is an electric car for people that will turn electric mobility from niche to mass."

That's a giant bet for the manufacturer, which has been seeking to reinvent itself four years after admitting that it lied with tests for its diesel engine's emissions. A scandal that has cost VW more than $ 30 billion so far. This painful event triggered a complete rethink for the company, which said it would invest nearly $ 50 billion in electric vehicles, more than any other manufacturer.

The start is ID.3, the first of at least 70 electric cars that the group will deploy with this colossal investment. Production of the model begins in November, and in 2020, two factories in China will join, bringing ID.3's annual production capacity higher than Tesla's total sales in its history.

By 2022, the company expects to have eight plants in the world that will produce BEV models (100% electric vehicles).

Dies, who reached the top of VW, having previously gained the necessary experience in BMW AG and Robert Bosch, has promised managers that the electric offensive will help VW's market value double to € 200 billion, according to people familiar with it.

The moment does not seem very appropriate for this whole invasion. Experts say a major financial crisis is coming and sales in China are falling dramatically. There is an unprecedented trade war between China and the United States, in which the European automotive industry has recently been involved. There is still no clarity about Brexit.

We are writing this just hours before the official premiere of the new VW Golf VIII, which will take place at 7.30pm Bulgarian time. Because while the ID.3 (priced at around $ 30,000 and 360 km) is aimed at the Tesla Model 3, it is likely that its biggest competition will come from Golf. But Golf itself is an example of change when things are done the right way. VW became a global brand after World War II when Beetle gained millions of fans worldwide. But in 1974 the company introduced Golf, which led it to the top of the European automotive industry. Applying the same focus to a massive e-campaign, "VW can get past the CO2 challenge as a winner," says Tom Narayan, an analyst at RBC Capital Markets. "ID.3 is the cornerstone of this whole thing."