Published: Fri, March 15, 2019
Markets | By Otis Pena

Volkswagen vows to build 22 million e-cars over next decade

Volkswagen vows to build 22 million e-cars over next decade

Volkswagen AG's main auto brand plans to deepen cost cuts and ax more jobs as profits slip in the industry's shift to electric and self-driving cars.

The profit margin at its core VW brand slipped to 3.8% past year, down from 4.2%, as higher investments into electric cars and challenges getting combustion-engined vehicles certified ate into profits. The company is strongly focusing on reducing its carbon emission to meet the emission standards of Europe and partly also due to increased focus by china on reducing emissions.

The VW brand accounts for about half of VW Group's global deliveries. It says it wants to introduce 70 all-electric or hybrid-electric vehicles across its brand range within the next 10 years, which is more than the 50 it had previously cited. VW has been pushing to rein in bloated expenses to lift profitability that is trailing rivals. Tesla's approach "is right, ' rather than building platforms for both electric and combustion engine cars as some traditional automakers have done, VW Chief Executive Officer Herbert Diess told analysts Tuesday".

The job cuts will be part of a savings drive aimed at slashing costs by 5.9 billion euros per year by 2023 at VW's own-brand division.

2020 Volkswagen Golf spy shots- Image via S. Baldauf  SB-Medien

Back in 2016, VW had launched the last major savings program that will run until the end of next year.

Volkswagen stuck to its outlook, reiterating that it expects revenues to grow up to 5%, and to deliver an operating return on sales at group level of between 6.5-7.5% in 2019.

The new Golf's absence from the Frankfurt Motor Show does not mean VW won't have anything important to debut as that'll be the venue where the first production-ready I.D. model will celebrate its world premiere. Order books for electric ID hatchback open on May 8 and sales chief Juergen Stackmann said feedback from dealers is so strong that the model might be sold out before its official presentation in September.

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