Volkswagen Looking to Go Big on Electric Cars Investment

Volkswagen made an announcement earlier last week that it will have the capability to increase its car manufacturing capacity up to 15 million electric cars in the course of a couple of years.

Indeed, the company is choosing to invest over $13.5 billion into both autonomous and electric vehicles before 2023.

Investing Heavily in Electrical Vehicles

Nevertheless, over 80% of the investment will be directed to electric cars.However, it is worth mentioning that the 15 million figure given is a rectification of the 50 million figure that Herbert Diess, Chief Executive officer had mentioned on Monday last week while having an interview with Automotive News.

Initially, Volkswagen has stated that it had laid plans to manufacture over 10 million cars, in what would be considered the first wave of its all-electric cars at a reasonable price. Volkswagen also plans to begin the production of over 27 electrical vehicle models before 2023, with their being cars under Skoda, Audi, and Volkswagen brands.

Indeed, the first models are poised to be released sometime in 2019. This is all part of the company’s strategy to permanently move from combustion engine models in its coming generation of cars that will rely on traditional technology.

Additionally, the company hopes to incorporate the highly anticipated MEB system (Modular Electrification Toolkit) which has been in the development process for the last three years by Volkswagen.

The MEB system comprises a series of EV building blocks that factor in features such as different axles, weight ratios, wheelbases, and drive trains that the vehicle requires.

Moreover, VW has also said that it plans to foster an alliance with Ford, and there are talks of the company using some of its plants to manufacture vehicles throughout the United States.

Collaboration

Rumors now abound that Volkswagen and Ford may actually be engaged in a future partnership, the sort of which has never been seen in the world. Speaking to reporters, Herbert Diess, the Volkswagen CEO, divulged that both automobile makers were looking into grounds for a potential collaboration.

As rumor has it, there’s a high probability that Volkswagen’s new MEB platform is actually going to be used in Ford’s electric cars. Still, that remains to be seen since if Ford was to decide on that option, the borrowed MEB platform would be an indicator that Ford is not fully in support of the electric car concept.

In a deal which was penned in June this year, the two companies have laid grounds for a strategic partnership that promises to revolutionize the game.

During the nascent stages of the collaboration, analysts believe that the two largest automakers around the globe will put more emphasis on conceptualizing commercial vehicles. However, this doesn’t mean that the two will neglect the needs of customers. Far from it.

Industry specialists have a firm belief that Volkswagen and Ford are likely to work out the fine details on the nature of their collaboration. Those in the know are expecting a full-fledged joint effort between the two companies. Alternatively, an equity swap would be another feasible approach. Whatever happens, there’s a high chance that we could be about to witness the formation of the largest company in the automotive world.

Birds of a Feather

According to a piece penned by The Detroit Bureau, a partnership between the two industry behemoths is likely going to be massively more than the typical scope of commercial vehicles. With both companies bringing in equal contributions to the table in terms of influence, it’s the German outfit, Volkswagen, that’s going to benefit from Ford’s strong foundations in the American automobile scene. More specifically, in the pickup and SUV departments.

On the flip side, it’s safe to say that the Blue Oval will equally benefit since Volkswagen has a large presence in China, Latin America, and Europe. All of which are regions where Ford’s market hold is diminished.

Whichever way one decides to view their joint effort, it’s important to note that both automobile manufacturers have a strong following in various markets. Their robust platforms are the bare minimum foundations necessary for growth and expansion.

At one point in time, Ford was regarded as the pioneering brand on all matters electric vehicles. However, the times have changed and companies like Volkswagen have taken the driver’s seat in the industry thanks to their rigorous electrification goals.

Not too long ago, Volkswagen was a popular brand before the Dieselgate saga happened. The company can borrow a leaf from Ford by conceptualizing a Ranger-based pickup.

In the new setup, Ford is expected to ditch the conventional sedans and coupes they have in the American market in favor of more autonomous and electrical vehicles. With talks still ongoing, there’s still room for plenty more developments in this waiting game.