Volkswagen To Launch 30 New All-Electric Cars – Yes, 30 – Seeking Alpha

Volkswagen (OTCPK:VLKAY) (OTCPK:VLKAF) (OTCPK:VLKPY) is the world’s largest automaker measured by unit sales volume, and has announced a major shift in production to electric cars, with major volume targets for year 2025. Based on prior statements, as well as recent management interviews with media, here are the targets for 2025:

  • Three million BEVs (battery-electric cars, as opposed to PHEVs, or plug-in hybrids) sold per year in year 2025. Two out of those three million will be sold in China; one million in the rest of the world.

  • 30 different BEV models under all VW Group brands (Volkswagen, Audi, SEAT, Skoda, Bentley and others) and an unspecified number of additional PHEV models. There will be 10 BEV and PHEV models combined announced in year 2018 alone.

Let’s start with the models that are closest to current production, and work ourselves up to the more ambitious models that are launching in 2019 and beyond.

Volkswagen e-Up

This model entered production before 2014 and is sold in Europe. It is a very small compact car, smaller than the Golf, and 37 of these cars are manufactured each day. It will transition to a new model in 2019. Currently using Panasonic (OTCPK:PCRFY) battery cells – just like Tesla (NASDAQ:TSLA) – it has yet to be decided what company will be the battery cell vendor for the e-Up when the model transitions in 2019. However, such a decision is imminent.

Volkswagen e-Golf

The e-Golf entered production in Wolfsburg in March 2014 and was using a battery pack with Panasonic battery cells, just like Tesla. It had a range of 83 miles as measured by the U.S. EPA test cycle. In December 2016, a refreshed model took over, containing Samsung (OTC:SSNLF) cells. This model has a range of 124 miles. VW makes 108 of these e-Golfs per day.

The refreshed/improved e-Golf is starting to be delivered in Europe right now, and in the U.S. in a matter of weeks. It faces a difficult task competing with the Chevrolet (NYSE:GM) Bolt, which is a similarly sized car, but has 238 miles of range compared to 124 for the new e-Golf. Clearly it must be priced a lot lower. Hyundai (OTC:HYMLF) has decided that the magic number is not too far from $7,000, so perhaps if Volkswagen agrees, it too will carry an MSRP of approximately $30,000 before discounts and government incentives. We will find out as this year progresses as to whether that is enough to grow unit sales volumes.

Volkswagen will soon be increasing the production of the e-Golf, as it adds a small production line in its Dresden “Glass” factory: here.

This production is likely to be on the small side, not exceeding 20,000 cars per year. Until 2015, Volkswagen made its flagship sedan, the Phaeton, in this Dresden factory. The Phaeton was discontinued, and has been retooling for the e-Golf, where production is starting in the next two months.

Volkswagen Golf GTE (Audi A3 Sportback e-tron)

The Golf GTE is not sold in the U.S., but its sister car the Audi A3 e-tron is. It yields close to 16 miles in electric mode, and runs like a regular gasoline-electric hybrid after that. Having been in production for approximately two years now, it will be refreshed in early 2018.

The refreshed Golf GTE (and presumably Audi A3 e-tron) will switch from using Panasonic batteries to Samsung, and the car will see a 40% improvement in electric range. This may be the moment when the U.S. consumers also get the Golf GTE.

Passat GTE

The VW Passat GTE is not sold in the U.S., but has been a huge sales success in Europe, where it leads the plug-in sales charts in many countries in many months. Sweden and Holland come to mind. In total, 150 per day are manufactured in Volkswagen’s Emden plant.

The Passat GTE was the first Volkswagen plug-in to use Samsung battery cells. Volkswagen is not saying anything about any next steps for evolving the Passat GTE. The current car entered production in June 2015 and remains very fresh. I have driven one on the Autobahn and had no problems getting it up to 130 MPH (209 km/h) and keep it there in a sustained manner. The same goes for the Golf GTE.

Act #2: The Intermediate Stage

Bridging the current and soon-to-be updated models described above, with Volkswagen’s true long-term future all-electric platforms, are two 100% electric models:

Audi e-tron

This tall station wagon/crossover was first shown in September 2015, just before the Dieselgate news broke. The production of e-tron had already been in development for at least a full year since around the middle of 2014, and possibly, even longer.

It enters production some time in 2018 in Audi’s Brussels, Belgium, factory, and should be in U.S. dealerships by late 2018. Reports suggest a choice of three battery sizes – 70 kWh, 95 kWh and 105 kWh – but those technical details have not been officially confirmed by Audi.

The Audi e-tron will compete with the Jaguar (NYSE:TTM) iPace, Mercedes (OTCPK:DDAIY) EQ and the future Tesla Model Y more than anything. By 2019, most likely also Volvo (OTCPK:VOLVY).

The Audi e-tron was decided upon before Volkswagen decided on the MEB platform, which will power “all” future all-electric VW Group cars starting in 2019-2020. More about that below. As such, the Audi e-tron will be sort of an “one-off” in the history of the Volkswagen Group’s electrification efforts as far as BEVs (100% battery-electric vehicles) are concerned.

Well, almost.

Porsche Mission E

The Porsche Mission E is the only other car that falls into this “intermediate” bucket, bridging the current BEVs that the VW Group has to offer and the MEB long-term future. Porsche has been sparse with technical detail, but the Mission E may share some things in common with the Audi e-tron. Or not. It is simply not clear how much, if any at all.

In any case, VW’s management reiterated on Tuesday that the Mission E remains on track for 2019. I interpreted its comments to mean consumer deliveries in 2019 – not showing the final production version of the car, or commencing production.

The most direct competitors to the Porsche Mission E will be Tesla Models S and 3, although with seating for only four people, it will be smaller on the inside according to at least one important definition.

Act #3 and the end goal: The MEB platform (“toolkit” in VW-speak)

All of the cars mentioned above were merely the appetizers for VW’s big bet on a fully electrified future platform (“toolkit”). Some of Volkswagen’s key team members come from BMW (OTCPK:BMWYY) where they developed the BMW i3. They realize that in order to optimize an electric car, it cannot share anything that is not purely coincidental, with cars containing traditional internal combustion engine (ICE) powertrains.

Therefore, MEB will be all-EV only, aka BEV (Battery-Electric Vehicle). The current plan is to offer 30 different cars on this MEB platform by 2025. This goes from the smallest compact cars to the largest vans and every conceivable body style in between. It also includes all brands, from VW to Audi to Skoda to SEAT and all or most of the other VW Group brands.

VW will begin pilot production on the first MEB car around the middle of 2019. It has not yet said in which factory this will be. This pilot phase would be a bit longer than usual for a new car, because this is an all-new platform. Consumer production would not start until 2020, as a 2021 model. This all-new platform requires a lot of torture-testing to ensure flawless build quality and no issues coming back to haunt the company in terms of recalls or warranty issues.

The MEB platform looks much like almost all the other pure electric car platforms we have been shown from Tesla, BMW, Faraday Future, Mercedes, Jaguar and Volvo. Ford (NYSE:F) is likely to show something similar as well, no later than 2019. In Volkswagen’s case, the principle is simple: Every car will be rear wheel drive as standard. Pay a little extra, and you get a second electric motor driving the front wheels as well. It is exactly the same as the difference between a Tesla Model S 60 and a Model S 60D.

Audi has already stated that it will be using MEB for its models after year 2020, and one can assume it won’t be far behind the Volkswagen brand in this development, if behind at all.

Volkswagen says that the first car in the MEB series will be in the overall size of the ID concept car it showed in September 2016. It has a footprint (length/width) fairly similar to a Golf, but it’s taller, and because of the height and interior packaging, it has more interior space than a Golf.

Soon thereafter, MEB versions of all conceivable body styles and sizes will follow: Sedans, crossovers, SUVs, minivans and so forth. The full roll-out of 30 models is targeted for completion by 2025.

The next step in this equation will be for Volkswagen to tell us where the MEB cars will be made. They have to be made on a separate assembly line for optimum efficiency. They will be able to share things such as paint shop and body stamping with the regular gasoline/diesel cars, but the rest of the assembly line would look a bit different, and so therefore that part of the assembly line would be separate.

Right now, Volkswagen’s 120 factories around the world are negotiating with the VW headquarters in Wolfsburg as to who will be the first few factories to make the initial MEB models. This will depend on many factors, including the broad concept of likely having the first three factories spread among Asia (China), Europe and the Americas in order to have the assembly close to the end markets.

When will we see it?

We are less than one year away from seeing Audi’s next steps in bringing EVs to market, including the 2018 e-tron. We will likely see the final version of the Porsche Mission E before the end of 2018, as it goes into production in 2019.

Meanwhile, under the Volkswagen brand, we will be seeing more and more MEB concept cars in all body styles and sizes, probably one new concept car every six months. By early 2019 we will see the production version of the “ID” (no final name decided yet) car, the first in the MEB series, as it enters pilot production around the middle of 2019.

Volkswagen was among the first – notably after Nissan (OTCPK:NSANY) – to make an affordable (under $40,000) and practical electric car and sell it in meaningful volume both Europe and North America, with the e-Golf. It has now fallen behind GM in particular, which is vastly beating the VW e-Golf in all dimensions with the Chevrolet Bolt (Opel Ampera in Europe). Nissan is also launching its replacement for the LEAF in September 2017, and it should also vastly exceed the performance of the VW e-Golf.

Volkswagen has lost its early decent position in fully electric cars that it had two years ago. However, it’s recharging and has a plan to offer the most attractive portfolio in the industry starting with the Audi e-tron in 2018, the Porsche Mission E in 2019, and the first car in the MEB series in 2020. The race is far from over, but VW had better deliver on all of these buns in the oven.

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