Volkswagen announces five-year plan to accelerate EV production and software strategy

Following a recent supervisory board meeting, Volkswagen Group has announced a major shift in its electrification strategy to expedite EV production over the next five years. Additionally, the German automaker intends to revamp its software strategy in support of the effort. Software issues have had a huge effect on Volkswagen’s EV output up to this point.

Despite its software issues and supply chain constraints, Volkswagen Group has seen tremendous growth and demand for its ID lineup of all-electric vehicles. A growing appetite for zero-emissions vehicles around the globe helped the German automaker reach its 500,000 ID delivery target a year early, leading some analysts to believe Volkswagen will eventually surpass market leader Tesla in sales as early as 2024.

Of those half a million deliveries, however, most were for one EV – the ID.4, which saw 330,000 deliveries in 2022 alone. That is still a tiny number when compared to the 4.56 million vehicles VW delivered last year.

Clearly, there is room for improvement, which is the same sentiment shared by Group CEO Oliver Blume, who took over for Herbert Diess last summer. Blume’s first planning round with Group executives and supervisors was postponed from its scheduled date in November so the new chief could get his bearings.

Blume has since audited most of the Volkswagen’s current strategies including EV production and recently held the meeting to discuss a complete strategical pivot.

Volkswagen to share full EV production plans in March

According to a statement from Volkswagen Group, its management team presented a five-year investment plan to the supervisory board this past Friday, which incudes an accelerated shift to bolstered EV production and a revamped software strategy.

Per Reuters, another topic of discussion during Friday’s meeting was the decision of whether or not to erect a new EV production facility for the Trinity sedan. It was originally planning to launch in 2026; the former CEO Diess said it will “revolutionize Volkswagen.” Another possibility discussed late last year is to build Trinity at VW’s current plant in Wolfsburg.

An additional item on Friday’s docket was discussing which new EV models would see production at Volkswagen’s facility in Hannover, Germany, which is scheduled to end production of the Bus 6.1 combustion model soon. If a new model doesn’t come to Hannover, 1,000 jobs could be on the chopping block.

That being said, a spokesperson for the works council relayed that Hannover’s jobs are guaranteed under an agreement with Volkswagen through 2029, so we’d expect to see a new EV take over the plant’s production lines.

Answers to the discussions above have not been made public at this point. All we know is that VW intends to speed up its electrification strategy and re-strategize the software development to support those vehicles. Volkswagen states that it will share full details of Friday’s meeting during its annual media conference on March 14, 2023. Stay tuned.