Volkswagen Group Reaffirms Internal Combustion Will Be ‘Phased Out’

You can sum up the last few years in the automotive industry with four words: “Easier said than done.” That applies to just about every car company with big (or small) dreams for electric, connected and increasingly automated vehicles. The Volkswagen Group, the original “pivot to electric vehicles” automaker following its diesel emissions cheating scandal a decade ago, truly embodies this challenge.

It’s made tremendous strides to become a company that’s ready for the rest of the 21st century, but not without massive headwinds on multiple fronts. Now, after strong sales and profits in 2023, it’s preparing the biggest ramp-up of new products its family of brands has ever seen. That move is underpinned by a lot of new EVs—and some flexibility during “the transition,” too.

That kicks off this midweek edition of Critical Materials, our morning news roundup. Also on today’s dance card: Tesla, Ford and other automakers get nailed for their driver assistance systems, and the software-driven vehicle revolution hasn’t even really gotten started yet. 

30%: The VW Group’s New Car ‘Tour De Force’ In 2024 And Beyond

I’m in Germany this week for the Volkswagen Group’s Annual Conference, which isn’t just a deep-dive into the conglomerate’s 2023 financial results but a look at what’s coming next. CEO Oliver Blume, who has been in the top spot since 2022, reaffirmed today that what the Germans often call “electro-mobility” is the future of the entire company. 

It’s coming off a good year to keep that momentum going. In 2023, the VW Group saw deliveries rise 10% globally with an operating profit of €22.6 billion (about $25 billion.) But converting the world’s second-largest automaker—one whose portfolio of brands stretches from bargain-basement Skodas and VWs to six-figure Lamborghinis and Bentleys—into a battery-powered business, while staying alive to do it, is far from easy.

Besides the massive costs of ramping up battery and EV production and delays of key products due to software woes, the VW Group is facing a volatile Chinese market, uneven EV demand in the U.S. and Europe, a lackluster charging network basically everywhere, persistent post-COVID supply chain issues and rising interest rates. 

Those are not unique challenges. But the VW Group’s answer, Blume and his executives said today, is to charge forward with new models. “2024 will indeed be a record year when it comes to new products,” he said. “We are gearing up for the biggest product offensive in the history of the Volkswagen Group… planning to debut over 30 new models across all brands this year.” 

Blume added, “We have already announced some of the new models: the Volkswagen ID.7 Tourer, the ID.Buzz Long Wheel Base, the Volkswagen Golf, the Skoda Octavia, the Cupra Tavascan, the all-electric Porsche Macan, and the Audi Q6 e-tron.” More are coming, including the ID.2—an electric quasi-Golf replacement projected to cost around €25,000—and more announcements yet to come. 

Then there’s more talk of “the transition” that wasn’t as prevalent when VW was making those all-electric commitments post-Dieselgate. Those include more plug-in hybrids, which it is doing more of, like the new Tiguan PHEV in Europe.

But most interestingly of all, VW execs continue to say the current crop of engines and whatever electrified variants they get is about to be it for that technology.

“We will invest in our last-generation of ICE vehicles,” which are especially key for hybrids, board member and CFO Arno Antlitz said today. Then, he said, “These investments are going to be phased out.”

We’ll have more on this event throughout the week on InsideEVs, including from reporter Tim Levin, who’s getting a similar preview of what’s next from Audi. 

60%: Ford, Tesla, Volvo, Others Get ‘Poor’ Grades For Driving Assistance

Semi-autonomous driving assistance systems like Tesla’s Autopilot are said to lay the groundwork for a future much more driven by eventual self-driving cars. But do they really provide a tangible safety benefit to drivers right now?

The answer, according to the Insurance Institute for Highway Safety, is not really, the Wall Street Journal reports. 

Car companies have been introducing more so-called partially automated driving systems, which control the vehicle’s steering and speed in certain situations, and sometimes allow hands-free driving. The study, released Tuesday by the Insurance Institute for Highway Safety, gave a “poor” rating to 11 of 14 systems it tested, concluding that most lack adequate measures to prevent drivers from losing focus on the road. 

“Some drivers may feel that partial automation makes long drives easier, but there is little evidence it makes driving safer,” said David Harkey, IIHS president. “As many high-profile crashes have illustrated, it can introduce new risks when systems lack the appropriate safeguards.”

Only Toyota Motor’s Lexus brand earned an “acceptable” rating in the study, for its Teammate feature on the LS sedan, the industry-funded nonprofit group said. Two models received “marginal” ratings: General Motors’ GMC Sierra pickup truck, and Nissan Motor’s Ariya electric SUV.

Driver-assistance features on models from Tesla, Ford, Volvo, Genesis, Mercedes-Benz and BMW were given poor grades. 

I’m particularly surprised to hear that Ford’s BlueCruise got such a bad grade here. In my experience, it’s quite good at navigating mapped highways while aggressively noticing when a driver isn’t minding the road.

But I think that’s part of the problem, right? These systems are, for now, a new and novel way of “driving” that’s often poorly understood by a public often struggling to understand new tech systems in cars. That’s no excuse for systems that feel objectively unsafe at times—Tesla’s Full Self-Driving tried to drive me into oncoming traffic twice, and that certainly hurt my feelings—but proper education is a key part of this too.

90%: The Software War Hasn’t Even Started Yet

Finally, I’ll leave you with this from Wards Auto. When it comes to the software-defined vehicle—you know, a networked vehicle with advanced autonomy, constant over-the-air updates, subscription features and more—the industry has barely scratched the surface of what it wants to do.

Unsurprisingly, a survey of global automotive executives conducted by chipmaker NXP Semiconductors and Wards Intelligence finds that nearly 60% of the industry believe it will be beyond 2030 before more than half of the new vehicles sold annually in mature markets are software-defined.

[…] The challenges faced by OEMs in deploying OTA updates and upgrades in existing platforms, mainly due to legacy electrical/electronic architecture, monolithic software and limited control over the supply chain (as electronic control units are often vertically designed by Tier 1 suppliers), have driven OEMs to move toward the development of their own automotive software stacks.

Worth a read in full, because that’s going to be as key to the future of cars as batteries are, in many ways.

100%: What EVs Do You Want To See Volkswagen Make?

The whole group, not just the brand, either. Where do you want to see the VW conglomerate go next and at what price point?

Contact the author: patrick.george@insideevs.com