Volkswagen bets on electric vehicles, but relies on ICE cars for the money
Volkswagen is gradually converting its factories to produce electric cars. Until all of its factories can do so, the company must run them on what is currently available. This is why Antlitz said the company must keep ICE CREAM competitive vehicles: to ensure stable cash flow.
Electric vehicles and combustion engine cars currently have a profit margin gap. Volkswagen expects this gap to close within two to three years thanks to lower R&D (research and development) costs, savings in battery costs, increasing economies of scale and factory costs. lower thanks to multi-brand factories.
If things go as planned, Volkswagen expects its VE sales will represent 50% of the total in 2030. It could happen even sooner: the demand for ICE vehicles will decline very soon. In Europe, China and the United States, anyone who buys a car that uses fuel to get around will risk higher depreciation sooner than ever. After all, who will want to buy a used car that may have traffic restrictions or even be banned in certain places?
Volkswagen will prepare for this by simplifying its ICE lineup, offering fewer engine options and trying to make EVs competitive as soon as possible. In other words, he’s going to milk the ICE cow to feed the initiative of the electric car until she can walk on her own. The earliest would be best.