Volkswagen Group 'New Auto' aims to fulfill electrification prowess

Volkswagen's Zwickau plant in Germany / Courtesy of Volkswagen Group

By Kim Hyun-bin

Zwickau, Germany ― The Volkswagen Group is in the process of conducting a major restructuring by transitioning from a traditional car manufacturing hardware business to become a global leading software mobility corporation through its "New Auto" initiatives.

The New Auto strategy focuses on four major segments ― mechatronics, software, mobility and battery and charging ― which are Volkswagen Group's keys to transitioning into the electric vehicle (EV) market with full force.

To give a closer look, Volkswagen Group Korea invited local journalists to Germany to show the progress that has been made less than a year after announcing the New Auto initiative by visiting key factories and software companies under its wing.

The Volkswagen Group has 10 brands in seven countries including Volkswagen, Volkswagen Commercial Vehicles, Skoda, Cupra and SEAT as well as premium brands such as Audi, Lamborghini, Bentley, Ducati and Porsche.

Volkswagen employees work on the assembly line for EV models at the company's Zwickau plant in Germany, May 20. Korea Times photo by Kim Hyun-bin

Start of electrification

Volkswagen's Modular Electric Drive Toolkit (MEB), a modular EV platform, is taking another step toward becoming the industry standard for e-mobility.

"The Volkswagen Group focused on two main axes in pursuing platform innovation. Volkswagen focused on expanding its volume segment and aimed to provide a special mobility experience for customers," said Andreas Walingen, chief strategy officer at the Volkswagen Passenger Cars brand. "On the other hand, Audi and Porsche have developed platforms around premium performance experiences (PPE). Since each brand has different characteristics, we decided that pursuing two platform strategies, MEB and PPE, would be effective in achieving the Volkswagen Group's aggressive electrification goal."

The company set aside 52 billion euros to invest in electrification alone from 2022 to 2026 in efforts to introduce 50 new EV models by 2030 and bring up the EV lineup to over 50 percent of the company's vehicles.

Ford Motor Company plans to produce EV models for the European market based on the MEB platform. The U.S. carmaker will also double its planned MEB volume to 1.2 million vehicles over a six-year timeframe. Designed as an open vehicle platform, the MEB allows car manufacturers to electrify their portfolio quickly and cost-effectively, the company said.

The MEB offers a high level of competitiveness while providing considerable freedom in design and model development. It covers a wide range of segments and vehicle types, from compact vehicles up to SUVs and vans. The most recent model based on the MEB is the Volkswagen ID. Buzz.

Reporters representing local media and The Korea Times visited the Volkswagen Zwickau plant, which is a representative factory that produces models based on the MEB and is the first example of an internal combustion engine plant converted to 100 percent EV production. It aims to produce 3.3 million cars a year for six MEB-based models.

Volkswagen ID.3 and ID.4 models started production in August 2020, and Audi Q4 e-tron models started production in March 2021. Since January of this year, the Volkswagen ID.5 is also being produced.

A Volkswagen ID.4 vehicle is in production at the company's Zwickau plant in Germany, May 20. The ID.4 is expected to be launched in Korea in the second half of this year. Korea Times photo by Kim Hyun-bin

The plant aims to increase daily production to 2,400 from the current 900.

"Currently, we are running two shifts only capable of producing 900 vehicles per day due to COVID-19 and other global uncertainties," a Volkswagen Zwickau plant official said. "But we plan to run three shifts and produce 1,400 vehicles per day by the end of the year and also planning a ramp-up that will increase production to 2,400 per day."

As of 2021, about 180,000 vehicles have been produced, and over 6 million vehicles have been produced since the establishment of the plant in 1990. It is the first plant to be converted from an internal combustion engine production plant to a 100 percent EV production plant, with an investment of about 1.2 billion euros.

"Currently out of the 120 factories under the Volkswagen Group, we are in the process of transitioning 10 plants to BEV," a Volkswagen Zwickau plant official said. "We plan to continue our electrification process for other plants in the near future."

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Robots work on attaching batteries at the Volkswagen Hannover plant in Germany, May 19. The plant operates over 800 robots taking up over 90 percent of factory operations. Korea Times photo by Kim Hyun-bin

Hannover plant and ID. Buzz

The Volkswagen Group's plant in Hannover manufactures vehicles and light commercial vehicles such as the T6 and T7 multi-vans and the Amarok pickup truck.

It also produces the first ID. Buzz electric bus and ID. Buzz Cargo electric light commercial vehicle.

In addition to the existing internal combustion engine model, the Hannover plant has undergone a comprehensive transformation, with the production of MEB-based pure electric commercial vehicle models.

"One assembly line is capable of manufacturing three different models ― T6, T7 and Cargo ― simultaneously. This is the only line that is capable of doing so not only in Volkswagen Group but the world," a Volkswagen Hannover plant official said. "Each assembly line has separate underpinnings and body shapes which could be assembled through one line. Usually, other companies have different lines for each model."

The official emphasized that the key benefits are being able to switch production to different models that have higher demand and without laying off employees when a specific model's demand goes down as they can easily switch models for production.

The plant stands as the most automated factory among the group with over 800 advanced robots in operations taking up 90 percent of the plant's assembly line operations.

Next-generation mechatronics platform

The Volkswagen Group is on course to lead the trends in the e-mobility sector by developing the next-generation mechatronics platform, the scalable systems platform (SSP) by 2026, which aims to converge the group's four vehicle platforms into one ― modular electric toolkit (MEB), premium platform electric (PPE), Modularer Langsbaukasten (modular longitudinal matrix), Modularer Querbaukasten (modular transversal matrix).

In the future, all segment models of all brands under the group will be produced based on SSP, and like the MEB platform, the SSP vehicle platform will be available for other carmakers.

"In the future, we plan to dramatically reduce complexity and development costs by integrating all platforms into one architecture called SSP. It will reduce complexity and development costs, resulting in huge economies of scale," Walingen said. "However, even if they share the same architecture, they can differentiate themselves through software providing various distinct functions for each vehicle."

The Audi Artemis project is expected to use the SSP platform for the first time in 2025, and Volkswagen, which is working on the Trinity project, plans to apply SSP technology to mass production starting in 2026.

"Through SSP, the group will be able to provide customers with innovative automotive features across all brands quickly and efficiently," Volkswagen Group Korea said.

Unified battery cells

Batteries account for the largest cost in electric vehicles, and if they can produce their own batteries, including repair and recycling, the cost can be reduced significantly. This is the main role of the new "unified cell," and by 2023 a single cell rather than multiple cells will be applied to most models produced by a group.

In particular, by introducing an integrated cell in 2023 and expanding it around the world, it plans to install it in 80 percent of EVs of all brands under the group by 2030. This aims to reduce battery costs by 50 percent in the entry-level segment and by 30 percent in the volume segment. By 2030, the company plans to establish six giga factories in Europe with a total production capacity of 240 gigawatt-hours (GWh) to secure battery supply.

"Batteries are the core technology of electric vehicles, and considering various aspects, it is necessary to have battery technology to be competitive. Cooperation with global partners along with an in-house battery strategy, together with the supplier we will stabilize the group's battery supplies," Walingen said.

Trinity Project

Trinity Project is the first Volkswagen brand based on SSP. The project aims to completely integrate three areas: the vehicle's hardware and software, and a new production method.

The group plans to implement level 4 or higher autonomous driving in the Trinity, from the current level 2. It plans to expand the scale of autonomous driving by selling around 6 million vehicles a year and refine autonomous driving technology more precisely by accumulating data from the vehicles.

In particular, starting with the Trinity project in 2026, the company plans to build a self-learning system that can exchange data such as traffic conditions, obstacles and traffic accidents with other vehicles through a vehicle network.

Several MOIA carpooling vehicles are on standby at the MOIA headquarters in Hamburg, Germany, May 19 / Korea Times photo by Kim Hyun-bin

The Volkswagen Group is currently testing its first self-driving bus in a pilot project in Munich, and plans to conduct similar autonomous driving projects in other major cities such as Germany, China and the U.S. MOIA, which currently provides fully electric ride-pooling services in Hamburg and Hanover, and aims to provide the first autonomous driving mobility service in Europe by 2025.

MOIA is a shared car-sharing service that provides a vehicle for passengers traveling in the same direction through a smartphone application.