VW: Challenges and opportunities coexist in China in 2021

Over the past three years, the development of China's new energy vehicle market has been relatively flat. To enhance the vitality of the new energy market, relevant departments, automakers, and infrastructure suppliers must work together to promote development. The efforts of a few large companies alone cannot reach expectations.

On March 15, 2021, the most severe dust weather in the past 10 years hit North China, which once again gave people a warning: environmental problems are already an urgent global problem, and everyone must realize its urgency. Severe and harmful. After all, we only have a planet on which we depend for survival. Every social organization and every country must plan and implement a visionary and implementable roadmap for sustainable development, so that we and future generations can have a quality life.

This week, European auto companies announced their 2020 earnings data. As the world’s largest auto group, Volkswagen, the world's largest auto group, established a video connection with China on the evening of March 17. The core media held a communication meeting, and conducted detailed communication on last year's performance, this year's goals, future development plans, and the development of new energy products for the masses that everyone cares about.

Time: 20:00-21:30 pm on March 17, 2021 (Beijing time)

Venue: Beijing V-Space Multifunctional Hall

Interviewee: Mr. Ralf Brandstatter, CEO of Volkswagen Passenger Car Brand &

             China CEO of Volkswagen Passenger Car Brand——Dr. Stephan Wöllenstein

Mr. Ralf Brandstatter, CEO of Volkswagen Passenger Car Brand

What is Volkswagen's vision?

Volkswagen is committed to becoming "the most attractive sustainable mobility brand." To achieve this goal, Volkswagen will work in the following four areas: autonomous driving, electrification, and working with partners to promote the implementation of the "acceleration" strategy, and the promotion of new business models.

What is the new SSP that Volkswagen recently mentioned?

More than 10 years ago, when many auto companies were still talking about platforms, Volkswagen took the lead in proposing the concept of MQB and MLB modular architecture, which was implemented in the subsequent production of fuel vehicles. Now Volkswagen has developed the MEB platform, which can serve more electrified vehicles through one platform. Up to now, about 80% of the mass-produced vehicles of the Volkswagen Group have adopted this technical solution.

For the future of electric travel, the MEB platform is now the first step. First, the goal of mass production of electric vehicles can be achieved through it. With the continuous development of technical requirements in the future, the platform strategy needs to make breakthroughs at the expandable level. Including the physical level and the digital level, so as to achieve the largest scale effect. SSP (Scalable Systems Platform) is proposed under this situation. It is not a new physical platform, but is developed through the existing MEB platform (for mass production models) and PPE platform (for high-end models). Come, become a unified platform to achieve long-term development. In Europe, when talking about the SSP platform, the strategic starting point is Audi's Artemis project and Volkswagen's Trinity project. And more models will be launched on this platform in the future.

What is the core focus of Volkswagen's NEV products?

Electricity and autonomous driving are the magic to change the future. Autonomous driving means more freedom. The visions of free socializing and relaxation in the car will gradually become a reality in the next 10 years. This summer, Volkswagen will provide OTA services, when hundreds of thousands of cars will realize real-time data transmission, and more new business models will be born in the future.

How will Volkswagen break through tradition in the future?

At present, sales of Volkswagen's internal combustion engine models are the main source of profit. By 2025, new energy models will be the same as internal combustion engine models. By 2030, the focus of profit will shift to electric vehicles. In terms of business model, Volkswagen’s primary goal is to digitize and lower the threshold for car purchases to provide consumers with more attractive prices; secondly, to provide consumers with customized products and services, such as flat-rate charging and on-demand charging Subscription vehicle features, etc. These are the business model 2.0 proposed by the Volkswagen brand, which is based on the digitization of electric vehicles and the ID family.

Regarding autonomous driving technology, how did Volkswagen implement it in China?

Volkswagen plans to launch L2+ and L3 autonomous driving in 2023 and 2024 to serve Chinese consumers. Because of specific laws and regulations, China's 5G and V2X are different from those in the United States and Europe, and these need to be self-built and cooperative to achieve localized and adaptive implementation.

An important part of electric vehicles is batteries. What are Volkswagen's development and goals for batteries?

Mr. Ralf Brandstatter said: Volkswagen’s “standard battery” is based on the group’s perspective of cost reduction and efficiency enhancement. In different markets around the world, Volkswagen will develop batteries based on different markets and apply them on all future platforms. Dr. Stephan Wöllenstein further introduced the plan for the Chinese market: Volkswagen will adopt its own standard batteries, and related model products will enter the Chinese market at the end of 2023 and 2024, and will apply this standard battery to all platforms, including MEB. The two mainstream battery structures, NCM and LTP, will be applied to Volkswagen products in parallel in the future. However, the low cost of lithium iron phosphate will help mass products gain more room for cost reduction.

What are Volkswagen's five-year plans and goals?

In 2021, it is planned to sell 450,000 electric vehicles worldwide, which will be twice as many as in 2020. In 2022, the production capacity of MEB models will reach 900,000-1 million units. In 2025, Volkswagen's electric vehicle production will reach 1.5 million units. By 2030, Volkswagen will sell more than 50% of its pure electric models in China and more than 70% in Europe. 2040 will be the deadline for the launch of Volkswagen's last generation of fuel vehicles.

For the Chinese market, what is Volkswagen’s biggest highlight this year?

ID.4 CROZZ and ID.4 X are produced at FAW-Volkswagen’s Foshan plant and SAIC-Volkswagen’s Anting plant. The production capacity is about 300,000 units. In addition, Volkswagen Anhui plans to produce 300,000-350,000 MEB models. Therefore, ID. The production capacity of the family in China will reach about 1 million units.

Volkswagen's ID.6 model will make its world premiere at the Shanghai Auto Show, and another ID. family model will enter the Chinese market at the end of this year. By 2023, there will be about 3 other models in the planning process, which does not include Volkswagen Anhui models. By 2025, Volkswagen will launch no less than ten MEB models.

Summary:

The one-hour Q&A session was originally planned, because there were too many issues and concerns regarding Volkswagen’s specific implementation actions in NEV section, especially electric mobility, was extended to 90 minutes, and it has always been known for its rigorous work style. It is rare for German companies to have such a situation. In the second half of the meeting, Dr. Stephan Wöllenstein even talked to the media present about new products, new technologies, and new marketing methods in the Chinese market now and in the future. At the same time, with regard to the current problems and difficulties, Dr. Stephan Wöllenstein also mentioned frankly that China’s passenger car retail sales in 2020 will be close to 20 million units, of which 1.14 million are new energy vehicles, although the overall sales of new energy are obvious. However, compared with the overall sales of passenger cars, it only accounts for 5.7%. If analyzed from the perspective of proportion, the US and European markets may soon overtake China. Moreover, some of the 1.14 million units sold are electric mini-cars, which is not universal in his opinion.

Over the past three years, the development of China's new energy vehicle market has been relatively flat. To enhance the vitality of the new energy market, relevant departments, automakers, and infrastructure suppliers must work together to promote development. The efforts of a few large companies alone cannot reach expectations.

In addition, the biggest difficulty at present is the impact of the shortage of semiconductor chips. Dr. Stephan Wöllenstein estimates that in the second quarter of this year, the shortage of chips will continue and sales will also be affected to some extent. Perhaps it is the firm belief that "the solution is always more difficult than the difficulty", or the intensive promotion plan of new Volkswagen products this year, Dr. Stephan Wöllenstein believes that by the end of this year, the market share and sales of Volkswagen products will increase year-on-year.