While the European car industry is hurtling towards the mass manufacturing of electric vehicles, there’s a question hovering over whether car makers will be able to make a profit on such cars.
Getting battery costs down below $100 per kWh isn’t proving as easy as hoped. (Renault has recently pushed the date for that back to 2025.) The battery is a large part of the cost of an EV and its component materials are vulnerable to geo-politics and the moves of international commodity markets.
Volkswagen has consistently been firmly confident that it can move into profit with EVs, claiming last year that the MEB-based family of vehicles will move into the black by 2025. It expects 25% of the VW Group’s output to be MEB-based, at which point profits will start rolling back in on the project.
Eventually, 50 million MEB-based vehicles could be sold by VW, made at as many as 16 factories around the globe.
Certainly, such massive numbers would be one way of wrestling profit from electric vehicles, to which you might add the revenue expected from the information being sold to drivers via its planned cloud network.
In fact, there are two planned clouds: one for VW’s industrial base and suppliers and one for VW Group drivers. The former is being developed with Amazon and Siemens, will link VW’s factories and machinery, and allow the use of new software and apps as and when required.