Volkswagen aims to go electric, raise lagging profits

The company recently revealed its plans for the next 25 years and it will focus heavily on developing electric vehicles.

Volkswagen on Friday announced plans to significantly reduce its workforce over the coming years as it deals with its costly diesel emissions scandal and push into electric cars. Again, the objective in this segment is ambitious: Volkswagen plans to achieve a leading role in the world of innovative mobility models by 2030, Diess said. A dedicated digital platform for the linking of its vehicles with digital services is on the cards, and the automaker aims to have approximately 80 million active users worldwide by 2025. Volkswagen estimates that its sales revenue from services related to networked vehicles will reach about €1 billion per year by 2025 and expects a significant contribution to earnings from this business area. We are not aiming for niche products but for the heart of the automobile market.

As a reminder, Volkswagen is now claiming that a production version of the all-electric ID concept vehicle revealed earlier this year will hit the market sometime around 2020.

North American production of electric cars will start in 2021.

The Volkswagen Atlas will be the first of many new SUVs heading to the US. The changes, he said, would make the company “leaner and more efficient”.

Under the new strategy, the German carmaker’s biggest unit plans to more than triple its profit margin to 6 percent and increase sales of electric cars to 1 million vehicles per year by 2025. They have half the board seats, and are generally supported by the government of Lower Saxony, which holds a stake in the company.

Luxury auto brand Audi, a subsidiary of Volkswagen, still sees a diesel vehicle as possible, its Americas president said last week.

Volkswagen has consented to pay billions of dollars in charges and compensation payments to US clients after confessing in 2015 to unfaithful on federal diesel emissions tests.

The scandal has been a spur for the company to address longstanding problems such as high fixed costs at its manufacturing locations in Germany and excessively top-down management that many say created an environment that enabled the cheating. The automotive industry is witnessing a shift in focus and it now points towards electric cars.

But it’s also reflective of a shrinking market for diesel cars and increasingly stringent regulations, a Volkswagen executive said.

Volkswagen has made a decision to cut down 30,000 jobs in an effort to resurrect its image after the scandal over cars rigged to cheat on diesel emission tests.