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VW Steps Up EV Production Plan, Yet Again

The Volkswagen Group, which is getting more bullish about electric cars by the month, now predicts its namesake brand will build 1 million EVs by 2023, two years sooner than previously forecast—and 1.5 million more in 2025 alone.
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The Volkswagen Group, which is getting more bullish about electric cars by the month, now predicts its namesake brand will build 1 million EVs by 2023, two years sooner than previously forecast.

The brand also expects to make 1.5 million more EVs in 2025 alone. The first of the models, which will be sold under the company’s ID sub-brand, is the $33,000 Golf-like ID.3. The car, which debuted at the Frankfurt auto show in September, won’t be offered in the U.S.

All-In for Electrics

VW Group has suddenly become the auto industry’s most aggressive booster of electrification. The company said in 2016 it would introduce more than 30 EV models by 2025. Last March it spoke of adding 70 all-electric models in 10 years. Last month that figure rose to 75 fully electric vehicles.

VW ID.3 electric car. Source: VW

What’s going on? VW’s rush to electrification came after the company torpedoed its own Plan A—to rely heavily on diesels to meet future carbon dioxide limits—four years ago. That’s when we all learned that VW had rigged 10 million of its diesel-powered vehicles to mask the true volume of nitrogen oxide (NOx) emissions from such models.

The resulting scandal hasn’t questioned the low CO2 output and subsequently high fuel efficiency of diesels. But it has undermined the perceived ability of diesels to meet even existing standards for NOx, a far more toxic pollutant.

Now VW and other major carmakers need an alternative to diesel power that can be implemented quickly. Electrification is the only viable option.

Ambitious Production Plans

In the case of VW Group, the swing from diesel to electric will entail €33 billion ($36.3 billion) in new investment—one-third of it on ID brand products—by 2024. Most of the spending will be about using EVs to meet looming CO2 limits in Europe and China. (The U.S. is poised early next year to roll back similar standards currently set to phase in between 2022 and 2025, thereby reducing pressure on carmakers to go electric in the American market.)

VW ID.Crozz concept.  Source: VW

VW began building the ID.3 last month at its factory in Zwickau, Germany. The car will go on sale in Europe next summer. It will be joined late next year by the all-electric ID.Crozz SUV.

Earlier today the company said that by 2021 the Zwickau complex will be cranking out as many as 330,000 EVs per year, making it the largest electric vehicle source in all of Europe. VW also is just beginning to make pre-production ID models in Anting, China, and will begin making the compact ID.4 electric crossover vehicle in Chattanooga, Tenn., about two years from now.

A Really Big Question

For VW and its EV-focused competitors are firmly committed to electrifying great swaths of their future product lineups. Not so obvious is whether they can lure a sufficient number of consumers to embrace electric vehicles quickly enough to garner the volumes carmakers need to meet upcoming CO2 targets.

The key to that answer will lie in achieving the right blend of performance and price.

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