Thomas Schäfer, CEO of the Volkswagen brand, has let the managers of the German company know that difficult times are ahead. During an internal meeting, the executive went so far as to affirm that “the roof is on fire”, because despite his huge investments to become a leading electric car manufacturer, the results are not accompanying.
Although in the United States, the sales of its electric range are advancing at a good pace, with deliveries of the ID.4 quadrupling during the second quarter compared to the same period last year, in China and Europe the demand is much weaker than expected, something that worries the management of the company a lot.
Schäfer openly says that the next few months will be “very difficult”, which is why a massive cost reduction of 10 billion euros will be sought over three years. “We are letting the costs get too high in many areas. Our structures and processes are still too complex, slow, and inflexible. “
The manager has asked that expenses be frozen immediately to compensate for the heavy investments in electrification. Let’s remember that, today, Volkswagen’s profit margin is one of the lowest in the industry, falling far behind not only Tesla but also other traditional manufacturers such as Stellantis.
Volkswagen pins its hopes on the MEB Entry and SSP platforms
Due to this, the Wolfsburg firm has little room for maneuvering to reduce the rates of its electric range, which runs the risk of losing attractiveness and competitiveness against the Chinese groups and Tesla itself, whose price war has hit the line floatation of the German giant.
All of Volkswagen’s hopes are pinned on two new developments: the MEB Entry and SSP platforms. The first of these will serve as the basis for the new ID.2, a utility vehicle approximately 4 meters long that will be released in 2025 with a starting price of around 25,000 euros before aid.
The second will be a new-generation architecture that will be characterized by its enormous flexibility, being in charge of replacing the MEB and PPE. As it will be used in all classes of electric vehicles, from affordable small cars to large luxury SUVs, it will enable significant economies of scale. Its debut is scheduled for the year 2026.