VW Targets Growth in EVs, SUVs, Mobility Services

Volkswagen AG today announced another strategic initiative in an effort to move beyond the diesel emissions scandal that has plagued the company for the past 15 months.

Dubbed Transform 2025+, the plan outlines the namesake brand's role within the Together-Strategy 2025 corporate program VW unveiled in June. The three-phase plan starts with restructuring the brand’s core business through 2020, expanding into electric vehicles and mobility services through 2025 and achieving a "leading role" in mobility by 2030.

The company vows to implement a clearer brand strategy—and updated design concept—across regions and segments. This includes positioning VW at the high end of the volume segment in all major markets, something the company it has done successfully only in China and Europe to date.

VW reiterates that electric vehicles and SUVs will be key focus areas. The company vows to make “massive investments” in e-mobility and connectivity technologies and services.

The VW brand is expected to account for half of the 2 million EVs the company expects to sell per year by 2025. Today’s announcement also confirms previous reports that VW plans to produce an unspecified EV in North America starting in 2021.

VW says it will expand its SUV and sedan lineup in the U.S. as it tries to evolve from a niche supplier into a mainstream carmaker in the region. At the same time, underperforming conventional models will be discontinued, which VW says will free up more than €2.5 billion ($2.7 billion) to help fund the new EVs.

SUVs and EVs also are key part of VW’s growth strategy in China. In other emerging markets such as India, South America and Russia, the brand will focus on economy models.

In terms of mobility services, VW aims to have 80 million active users worldwide by 2025 with annual sales related to networked vehicles reaching €1 billion. Overall, the brand aims to more than triple its profit margin to 6% within that period. Last week, VW Group announced a new labor agreement that is expected to save €3.7 billion ($3.9 billion) by eliminating 30,000 jobs over the next nine years.