The transition to electric cars can't be forced to go any faster, Volkswagen Group CEO Herbert Diess has cautioned.
Speaking at the Financial Times’s Future of the Car summit, Diess set out ambitions for 7-8% of the Volkswagen Group’s sales to be electric this year, rising to 25% by 2025 and 50-60% by 2030, highlighting that the issue with growing faster isn't down to customer demand but creating infrastructure to support their manufacture and operation.
“Everything will be there for growth, but it takes huge investment and time to achieve,” said Diess. “We need the correct plants to be modified or built, the battery production capacity to be available and to build a secure, sustainable supply chain.
"The customer needs the correct infrastructure to be put in place to live with the cars.”
Diess highlighted the German conglomerate's investment in six battery manufacturing plants in Europe at a cost of €2-3 billion each as an example. Late last week, the company confirmed that it would build one of these facilities in Spain to supply batteries to production lines building new Volkswagen, Cupra and Skoda urban EVs from 2025.
“Our goal is to be the world leader in EV sales by 2025. We have a very ambitious plan to achieve that and have invested hugely to achieve it, but some analysts aren't taking the amount of effort required to achieve our goals seriously enough,” said Diess.
Diess acknowledged that the Volkswagen Group is likely to be in a tight battle with Tesla to top EV sales by 2025, adding: “It will be a tight race. I have to say we didn’t expect our main US competitor to be so fast, and there's a step-change coming in their manufacturing capabilities, but we have more brands, from premium to mainstream, so we will keep the ambition.”
“It made sense to come into EVs top down, but by 2025 we think the time will be right for a Polo-sized car," he said.
"We have a new generation of batteries; aside from the raw material price rises, now our costs are coming down with scale.
"The demand is there and the margins are there for small electric cars to be profitable.”