Of the 180 billion euros allocated by the Volkswagen group to the development of electric cars, 60 billion will ultimately be paid into an envelope for the extension of hybrid, gasoline and diesel engines. Skoda must take care of this budget, but the development must benefit the entire group. The thermal engine market still has a bright future ahead of it.
After Ford and Mercedes-Benz, it is the turn of the Volkswagen group to review its strategy around electric cars and the withdrawal of thermal engines. Without trying to postpone a date or draw a line under an objective, the group which owns the Skoda, Audi, Seat, Cupra or even Porsche, Bentley and Lamborghini brands said that it would invest up to 60 billion euros in the development of new thermal engines.
Following this announcement, Volkswagen CFO and COO Arno Antlitz confirmed that “the future is electric”but qualified it by specifying that “the past is not over”.
To find these funds, Volkswagen symbolically drew on the envelope of 180 billion euros allocated to the development of the electric car. A third of the budget is therefore redirected, and it will be used at Skoda. The Czech brand having been chosen by the group to ensure the launch of small, economical engines capable of being approved despite increasingly strict standards in terms of CO2 and fine particle emissions.
This envelope of 60 billion euros is high enough to imagine seeing Volkswagen join the circle of manufacturers who doubt the complete withdrawal of thermal engines in 2035. In February, Mercedes drew a line under the objective of withdrawing the thermal energy by the end of the decade, and justified it by the fact that “customers and market conditions will determine the pace of transition”. Initially, Volkswagen’s outlook was to reach 80% of volumes oriented towards 100% electric in 2030.
Resumption of gasoline and diesel on B-segment models
The sum is not the only proof of a real long-term investment to counter the low demand for electricity. At the same time, the development of the thermal engine had slowed down, and today it is a question of relaunching it, which takes time, especially for a group as traditional and gigantic as Volkswagen, which is less reactive by definition. The engines which will have to come out of these programs will mainly be aimed towards the B segment, straddling models comfortable in the city and small family tours.
For the rest, Volkswagen does not intend to launch new generations of thermal models but simply postpone their exit from the market. With the allocated budget, the idea would therefore be mainly to launch restylings. By now, we’ve already seen the T-Roc and Tiguan benefit from small updates, whilst still retaining petrol and diesel versions in their respective ranges.
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