Volkswagen wants half of its vehicle sales to be electric by 2030

Half of Volkswagen’s sales are expected to be battery-electric vehicles by 2030, the German carmaker said Tuesday.

By 2040, the company said almost 100% of its new vehicles in major markets should be zero-emission vehicles.

Those objectives are part of Volkswagen‘s wider aim to be fully carbon neutral by 2050.

The firm said it would work on developing software to help boost profits as it focused on transitioning its vehicles from internal combustion engines to operating on batteries.

Volkswagen has earmarked 73 billion euros ($86.4 billion) for the development of future technologies between 2021 and 2025, which makes up 50% of the company’s total investments.

“By 2030, the world of mobility will have changed quote a lot, considerably, I would say more than ever before,” Volkswagen CEO Herbert Diess told CNBC’s Annette Weisbach Tuesday.

“Cars are getting close to autonomy, many cars will drive round autonomously. We will have a high share of EVs. Mobility as a service will increase.”

Volkswagen also announced it was developing three software platforms, with an aim to develop one software platform that can be used across all Volkswagen Group cars by 2025. Developers of the technology said on Tuesday that software could become a major source of income for the autos industry by 2030, with up to 40 million vehicles expected to be operating on the Group’s software platforms within the next decade.  

Volkswagen’s software company CARIAD is currently developing software platforms which will offer various features such as a unified infotainment system and the ability to hand steering controls over to the car.

In a further bid to boost its electric vehicle offering, Volkswagen announced it would establish a “controlled battery supply chain,” introducing one unified battery format and opening six giga factories across Europe by 2030.

The first factory in Skellefteå, Sweden, will be operated by Northvolt, and is expected to begin production in 2023.

In partnership with Chinese cell specialist Gotion High-Tech, Volkswagen will open a second giga factory in Salzgitter, Germany, with a view to begin production in 2025.

Speaking to CNBC, Diess highlighted the huge efforts that all carmakers were undertaking to shift to EVs.

“Batteries might be a continuous constraint for the growth of EVs over the next five to 10 years,” he said, also mentioning the extraction of lithium and nickel.

“Because the lead times are huge. We need so much energy and cell production … [There is a] huge supply chain which has to be set up within the next years, and that will, that might, lead to some constraints.” he said.

Volkswagen’s announcements on Tuesday came as part of its 2030 strategy, which comes ahead of a swathe of environmental policies expected to be announced on Wednesday by the European Union.

The carmaker has already begun to roll out fully-electric vehicles. In 2019, the company’s fully-electric ID.3 model sold out in the car’s presale.

Carmakers all over the world are racing to transition to electrification.

Stellantis — the product of a merger between Fiat Chrysler and France’s PSA Groupe — announced last week that it plans to invest at least 30 billion euros in electric vehicles and supporting technologies like software through 2025.

French carmaker Renault said in June that it had signed two new partnerships to develop a Gigafactory in northern France. Meanwhile, Swedish automaker Volvo aims to offer only electric vehicles by 2030.