Volkswagen is starting to understand Toyota with the advent of the electric car. Thus, it is investing 60 billion euros in combustion.

The electric car has become a headache for Volkswagen. The brand is immersed in a crisis from which it is difficult to find a way out. Poor planning and an unexpected decline in demand for electric cars have forced the Germans to reconsider their plans.

And that’s 60 billion euros.

Pharaonic Project. With a foundation that made the building shake from top to bottom. At the end of 2022, Volkswagen announced that its plans to create an electric car were moving forward and that in 2033 they would not sell anything on our continent that did not carry this technology.

The announcement came after a turbulent summer. Just a few months earlier, Herbert Diess, the company’s then CEO, had been fired. The news was presented as a resignation, but the information made it clear that the board had exerted sufficient pressure to ensure Diess’s departure. The arrival of current CEO Oliver Blume only confirmed the rumors.

The automotive group was in chaos. To move to electric vehicles, the company proposed a strategic plan that was deemed too expensive and complex. The group announced that it would retire its MEB platform for electric vehicles (the same one it currently shares with Ford). Meanwhile, its two luxury cars (the electric Porsche Macan and the electric Audi Q6) are to use the PEE platform, but this will only serve as a transitional function until the long-awaited version arrives. Scalable system platform (SSP).

On Fire. The project, as we have already said, has become a headache for Volkswagen. Porsche bought itself the freedom to act independently, the PEE platform of Porsche and Audi has suffered various delays. Audi had to buy the platform for its cars in China, in this country. The Trinity project, the most advanced for the SSP platform, has also been delayed. And Cariad has laid off thousands of employees because they were responsible for launches that did not happen on the expected date.

All this turned the Volkswagen Group upside down. Oliver Blume went so far as to say that the group was “on fire” and that very important economic adjustments had to be made. A 10 billion euro burnout to stop the bleeding, which even ended with the confiscation of Porsche executive cars from more than 200 employees.

They are not for sale. To all of the above, it must be added that their electric cars are not selling. Or at least not as much as Volkswagen expected. The Germans were not the only company that kept silent about the fact that the estimates were too optimistic. Mercedes, for example, abandoned its projects.

The truth is that demand for electric cars continues to grow, but has slowed in recent months. This makes sense, because once the high-end cars are in place, it remains to win over the general public. And for this large mass of customers, an electric car is still expensive, and options costing between 20,000 and 25,000 euros indicate cars with limited autonomy.

60,000 million euros. With electric vehicle growth slowing, Volkswagen has proposed continuing to invest in combustion engines to “maintain the competitiveness of our combustion engines,” according to Arno Antlitz, Volkswagen’s head of finance. Motor1.com.

The figure is not small: 60 billion euros. This is the amount that Volkswagen will spend on updating its engines and adapting them to emission limits that, if everything goes according to plan, will become increasingly strict in the coming years. However, we will have to wait, because Euro 7 has finally left everything more or less as it was, and the decision to ban combustion engines in 2035 is not entirely firm and has already recognized those that are “carbon neutral”.

Supply meets demand. However, Antlitz insisted that “the future is electric” and that the decision to go electric remains in place. But if the current state of cars shows anything, it’s that demand will have to grow significantly to meet the brands’ expectations.

If customers continue to ask for combustion engines, Volkswagen appears ready to provide them. A move that reinforces the strategic plans of companies like Toyota, which have consistently stressed that their electric vehicle production will only grow when there is enough demand to sustain it.

Photo | Volkswagen

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