TOPLINE Volkswagen, one of the <a href="https://www.carlogos.org/reviews/largest-car-companies.html" target="_blank" rel="noreferrer noopener">world’s largest carmakers</a>, plans to accelerate its transition to electric vehicle production in Europe by 2030, joining an array of other global automakers seeking to move deeper into the electric vehicle market in the coming years to help meet EU emissions targets.



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<ul class="wp-block-list"><li><a href="https://www.volkswagen-newsroom.com/en/press-releases/volkswagen-is-accelerating-transformation-into-software-driven-mobility-provider-6878" target="_blank" rel="noreferrer noopener">Volkswagen said Friday</a> that it expects all-electric vehicles to account for at least 70% of sales in Europe by 2030 — double its previous target of 35%.</li></ul>



<ul class="wp-block-list"><li>The automaker’s electric vehicle sales in the U.S. and China are targeted to reach 50% by 2030.</li></ul>



<ul class="wp-block-list"><li>Volkswagen also said it will invest about $19.1 billion in its electric vehicle programs by 2025.</li></ul>



<h3 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h3>



“We are stepping up the pace. In the coming years, we will change Volkswagen as never before,”&nbsp;<a href="https://www.volkswagen-newsroom.com/en/press-releases/volkswagen-is-accelerating-transformation-into-software-driven-mobility-provider-6878" target="_blank" rel="noreferrer noopener">said Ralf Brandstätter</a>, CEO of Volkswagen.



<h3 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h3>



The goal to increase electric vehicle production by 2030 matches the mandate by the&nbsp;<a href="https://www.reuters.com/article/us-climate-change-eu-transport/eu-to-target-30-million-electric-cars-by-2030-draft-idUSKBN28E2KM" target="_blank" rel="noreferrer noopener">European Commission</a>, the executive branch of the European Union, to have at least 30 million zero-emission vehicles on European roads by that year as part of its overall campaign to achieve carbon-neutrality in the EU by 2050.&nbsp;<a href="https://www.eea.europa.eu/data-and-maps/indicators/transport-emissions-of-greenhouse-gases/transport-emissions-of-greenhouse-gases-12#:~:text=In%202017%2C%20transport%20(including%20aviation,increased%20by%200.7%20%25%20in%202018." target="_blank" rel="noreferrer noopener">About 27% of EU greenhouse gas emissions</a>&nbsp;come from the transport sector, the Commission estimates, adding “The EU’s goal of climate neutrality by 2050 cannot be reached without introducing very ambitious measures to reduce transport’s reliance on fossil fuels.”&nbsp;



<h3 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h3>



To achieve its own electric vehicle sales goals, Volkswagen said it will release at least one new electric model car every year. Volkswagen joins a list of global automakers seeking to accelerate their own electric vehicle production goals.&nbsp;<a href="https://pressroom.toyota.com/toyota-to-debut-three-new-electrified-vehicles-for-u-s-market/" target="_blank" rel="noreferrer noopener">Japan’s Toyota</a>, is planning to have 40% of new global vehicle sales be electrified models by 2025 and raise that proportion to 70% by 2030. Last month,&nbsp;<a href="https://www.forbes.com/sites/palashghosh/2021/02/17/ford-motor-vows-to-sell-only-electric-cars-in-europe-by-2030/?sh=4fecdc08650c">Ford Motor said</a>&nbsp;it plans to invest $1 billion in an electric vehicle manufacturing facility in Germany, as part of its goal to sell electric cars exclusively in Europe and the U.K. by 2030.&nbsp;<a href="https://www.forbes.com/sites/michaeltaylor/2020/12/03/volvo-cars-to-be-all-electric-by-2030/?sh=6ce030ac33cb">Sweden’s Volvo</a>&nbsp;said last December that it will exclusively make electric vehicles by 2030.&nbsp;<a href="https://www.nytimes.com/2021/01/28/business/gm-zero-emission-vehicles.html" target="_blank" rel="noreferrer noopener">General Motors</a>&nbsp;said in late January that it will sell only emission-free vehicles by 2035. IHS Markit, a London-based data provider, said recently that<a href="https://ihsmarkit.com/research-analysis/ihs-markit-forecasts-global-ev-sales-to-rise-by-70-percent.html" target="_blank" rel="noreferrer noopener">&nbsp;global sales of electric vehicles</a>&nbsp;are estimated to have reached 2.5 million in 2020 and then projected to rise by 70% in 2021. This year, China and Europe will account for 44% and 28%, respectively, of global sales, followed by North America at 16%. In 2025, global sales will exceed 12.2 million, IHS Markit forecast.



<h3 class="wp-block-heading" id="h-big-number">BIG NUMBER</h3>



<a href="https://www.bloomberg.com/news/articles/2021-01-22/volkswagen-posts-12-2-billion-profit-in-resilient-pandemic-year" target="_blank" rel="noreferrer noopener">$12.2 billion</a>. That’s the profit recorded by Volkwagen in 2020, well ahead of analysts’ expectation of about $5.7 billion, but far below the $23 billion posted in pre-pandemic 2019. Volkswagen’s 2020 performance was boosted by soaring demand for luxury vehicles in China.



<h3 class="wp-block-heading" id="h-tangent">TANGENT</h3>



Volkswagen faces a fine of more than $119 million this year for<a href="https://www.cnbc.com/2021/01/23/volkswagen-profits-fell-automaker-missed-co2-emission-targets-in-2020.html" target="_blank" rel="noreferrer noopener">&nbsp;failing to meet</a>&nbsp;the European Union’s carbon dioxide emissions targets from its passenger car fleet last year.&nbsp;



<h3 class="wp-block-heading" id="h-further-reading">FURTHER READING</h3>



<a href="https://www.forbes.com/wheels/best/electric-cars/">Best Electric Cars For 2021</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/enriquedans/2020/12/06/the-moment-of-the-electric-vehicle-hasarrived/">The Moment Of The Electric Vehicle Has Arrived</a> (Forbes)



By Palash Ghosh, Forbes Staff

Volkswagen AG Headquarters Ahead of 2020 Earnings Announcement

Volkswagen Is The Latest Carmaker To Accelerate Its Electric Vehicle Ambitions

REE Automotive thinks the way to get electric vehicles into the mainstream is to flatten things out–by using a skateboard platform that integrates the battery, motors and driving controls into a flush floor and allows for independent steering of wheels. And while this tech startup’s concept is radical, it’s finding support from traditional automotive partners.



The latest to sign on is Tokyo-based KYB Corp., one of the world’s biggest makers of shock absorbers. The companies said today they’ve formed a partnership to develop suspension capabilities for electric vehicles that will be built off of Tel Aviv-based REE’s platform. Financial details of the arrangement, the first EV project for KYB, weren’t disclosed. REE emerged from stealth mode in 2019 and is also working with Toyota-affiliated truckmaker Hino, Mitsubishi Corp. and FiatChrysler.



<div class="wp-block-image"><figure class="alignleft size-large is-resized"><img loading="lazy" decoding="async" src="https://www.forbesafrica.com/wp-content/uploads/2020/05/960x0-1-1-797x1024.jpg" alt="" class="wp-image-45572" width="194" height="249" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/05/960x0-1-1-797x1024.jpg 797w, https://cms.forbesafrica.com/wp-content/uploads/2020/05/960x0-1-1-300x386.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/05/960x0-1-1-600x771.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/05/960x0-1-1-233x300.jpg 233w, https://cms.forbesafrica.com/wp-content/uploads/2020/05/960x0-1-1-768x987.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/05/960x0-1-1.jpg 960w" sizes="(max-width: 194px) 100vw, 194px" /><figcaption>CEO and cofounder Daniel Barel REE AUTOMOTIVE</figcaption></figure></div>



KYB is “excited to partner with REE Automotive and share its revolutionary EV vision by engineering a suspension subsystem that supports the needs of tomorrow’s mobility ecosystem,” Kazunori Masumoto, KYB’s general manager of engineering, said in a statement. 



For more than a decade, many companies have touted the benefits of standardized, flat undercarriages that could support multiple vehicle types, from sedans and crossovers to vans and commercial trucks, to dramatically eliminate costs to create individual platforms for each. Most recently, electric truck startup&nbsp;<a href="https://www.forbes.com/sites/alanohnsman/2019/12/23/electric-truckmaker-rivian-backed-by-amazon-ford-raises-whopping--13-billion/#3a2ca1031847">Rivian</a>, automotive tech firm&nbsp;<a href="https://www.forbes.com/sites/alanohnsman/2020/02/11/hyundai-adds-electric-vehicle-skateboard-project-with-la-startup-canoo-to-its-87-billion-mobility-push/#139d4beb1017">Canoo</a>&nbsp;and the U.K.’s&nbsp;<a href="https://www.forbes.com/sites/alanohnsman/2020/01/29/ups-jumps-into-the-future-with-plan-to-buy-10000-electric-vans-and-a-waymo-self-driving-delivery-pilot/#735e17105aa5">Arrival</a>&nbsp;have promoted flat platforms for a range of battery-powered vehicles, but REE cofounder and CEO Daniel Barel says his company takes the approach even farther.&nbsp;



“They’re great, but they are not skateboards. Only the middle is a skateboard,” Barel tells Forbes. The difference is how much battery REE’s design can accommodate and the complete integration of drive controls into the floor, he says. “We hold the most batteries per footprint than anybody else in the industry.&#8221; 



Barel says his company, which is not building complete vehicles, intends to have its technology on the road in 2021. One possible version was shown in October at the Tokyo Motor Show by Hino, with its <a rel="noreferrer noopener" href="https://www.hino.co.jp/tokyomotorshow2019/en/booth/" target="_blank">FlatFormer electric concept vehicle</a> riding on an REE-based platform. The Japanese truckmaker showed variations of the concept modified to serve as delivery trucks, food service and sanitation vehicles, mobile offices and salons and even agricultural and sanitation trucks, with different tops riding on the platform.



“KYB’s technology will play a crucial role in the rapid development of our next-generation EV architecture, which reinvents the electric vehicle with a completely flat, scalable and fully modular platform, ready to carry the future of e-mobility,” Barel said.



Along with lowering development costs, electric vehicles using REE’s technology will be lighter and considerably more compact. “We’re not only 33% lighter, but we’re almost 70% smaller in footprint” relative to Tesla Model 3, with the same interior volume, Barel claims. The business plan would rely mainly on supplying its design to different companies, ranging from auto and truck manufacturers to delivery and logistics companies, that he declined to identify.&nbsp;



To date, REE has raised “about $100 million” from investors and automotive partners, Barel said, without elaborating. That’s more than double the $40.2 million the company had raised through its Series C round in 2018, according to Crunchbase. Additional fundraising is planned for 2020, though he didn’t provide details.&nbsp;



If REE or other startups can bring viable platforms to market, demand could be strong, says Gartner&nbsp;<a href="https://www.forbes.com/companies/gartner" target="_blank" rel="noreferrer noopener">IT</a>&nbsp;transportation tech analyst Mike Ramsey. “There&#8217;s a lot of reasons to think that this would be super appealing. You&#8217;ve opened up the world of automakers very large, potentially, you know, with this platform approach,” he said. “But it does still require a lot of additional work–the crash testing, the assembly system and everything needed to support it.”&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



Whether REE’s approach works in the real world remains to be seen, but it’s an approach that could help speed the slow shift away from conventional internal combustion engine designs if it helps make EVs easier to build and much cheaper. Barel sees flat platforms as doing just that.&nbsp;



“To keep on building vehicles the same way we’ve been doing it for a hundred years doesn&#8217;t make a lot of sense.”



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<iframe loading="lazy" title="The future of electric mobility" width="500" height="281" src="https://www.youtube.com/embed/RnbSnVPFSNg?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
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&#8211;<a href="https://www.forbes.com/sites/alanohnsman/">Alan Ohnsman</a>, Forbes Staff, <a href="https://www.forbes.com/transportation">Transportation</a>

960×0

A Bottom-Up Approach To Cheaper, Next-Gen Electric Vehicles

Tesla has always been a volatile stock, with remarkable surges in value frequently followed by sudden, painful reversals – triggered by unfavorable news or bad financial results. The swing that&#8217;s played out in the past eight trading days has been a doozy, with the shares dropping 19% from their June 23 high.
The current slump has eliminated more than $12 billion of market capitalization and in the process taken away Tesla&#8217;s bragging rights as the <a href="https://www.forbes.com/sites/alanohnsman/2017/04/10/musks-tesla-rockets-past-gm-to-become-the-most-valuable-us-carmaker-at-51-5-billion/#198cb9b929e6" target="_blank" rel="noopener noreferrer">most valuable U.S. carmaker</a>.
Shares of the Palo Alto, California-based company dropped 5.6% on Thursday, shrinking Tesla’s market capitalization to $50.7 billion, down from <a href="https://ycharts.com/companies/TSLA/market_cap" target="_blank" rel="noopener noreferrer">$62.99 billion</a> less than two weeks earlier. That put Tesla behind General Motors, which had a $52.65 billion valuation on Thursday, though still ahead of Ford at $44.64 billion.
The biggest hits to Tesla came in trading this week, with consecutive declines every day through Thursday. That coincided with Elon Musk’s announcement that the company’s long-awaited mass-market car, the $35,000 Model 3, <a href="https://www.forbes.com/sites/alanohnsman/2017/07/03/elon-musk-says-tesla-model-3-deliveries-to-start-slowly-from-july-28/#1050c5e76514" target="_blank" rel="noopener noreferrer">begins shipping late this month</a>. While it&#8217;s a positive development, Musk also said deliveries would be limited until the end of the year. (Just 30 units in July; 100 in August; maybe 1,500 in September; then rising to 20,000 by December, if all goes well.)
<a href="http://www.forbesafrica.com/billionaires/2017/06/12/elon-musks-goals-tesla-will-require-billions-capital-investors-cheer/" target="_blank" rel="noopener noreferrer">Elon Musk&#8217;s Goals For Tesla Will Require Billions More In Capital; Investors Cheer</a>
Tesla also said second-quarter sales and production of Model S sedans and Model X crossovers, both of which typically sell for $100,000 or more, fell short of the company’s and analysts&#8217; expectations. Instead of 25,000-plus, it got just over 22,000 cars to customers worldwide. The cause was a shortage of 100-kilowatt-hour battery packs, Musk said, a problem that Tesla hadn’t previously disclosed.
Aside from that, Goldman Sachs analyst David Tamberrino saw something troubling in Tesla’s July 3 sales and production release: A looming slowdown in growth for Tesla’s two highest-margin vehicles.
“We believe that the Model S and Model X are showing plateauing demand,” Tamberrino, who rates Tesla a &#8220;Sell,&#8221; wrote in a July 5 research report. That led him to cut his growth forecast for the two vehicles to a 5% compound annual growth rate through 2021, down from a previous expectation of a 13% annual growth rate.
He also cut his target price for the stock to just $180, far below Tesla’s $308.83 close on July 6.
The threat of new competition in the electric vehicle space is also building up. Volkswagen, Audi, BMW, General Motors, Nissan, Honda and other companies for the past year or so have announced plans to add new and better EVs to their portfolios. But on July 5 <a href="https://www.forbes.com/sites/danroth/2017/07/05/volvo-electrifies-or-dies/#5f2baddf60c4" target="_self">Volvo went even further</a>, saying that it would transition to an all-electric lineup starting in 2019. At that point, it will no longer sell vehicles with merely gasoline or diesel engines. Instead, it will offer hybrid, plug-in hybrid and full EV models across its product line.
“We see it – especially after a visit to China last week – as more evidence … that Tesla will face intense competition by next decade from legacy OEMs who are expanding their electric options,” Barclays analyst Brian Johnson said in a research note on July 5. He has an “Underweight/Neutral” rating on Tesla with a target price of just $165.
<a href="http://www.forbesafrica.com/billionaires/2017/06/05/elon-musk-left-worker-safety-autopilot-long/" target="_blank" rel="noopener noreferrer">Elon Musk Left Worker Safety On Autopilot Too Long</a>
In China, Tesla has yet to find a local joint-venture partner to produce its vehicles. That’s kept it a minor player so far in the biggest and fastest-growing market for electric vehicles, Johnson said. What’s more, battery prices in China may be falling to a level that puts them below what Musk is aiming for when his massive $5 billion Gigafactory moves to full production in the next year or so.
“A flood of cheap Chinese batteries will negate Tesla Gigafactory scale advantages,” Johnson said.
If all that weren’t enough, the Insurance Institute for Highway Safety said this week that Tesla’s Model S, which has earned top scores in U.S. government crash tests, <a href="https://www.forbes.com/sites/jensen/2017/07/06/try-and-try-again-tesla-model-s-still-cant-ace-tough-crash-test-automatic-braking-still-untested/#5e589ccd78e8" target="_blank" rel="noopener noreferrer">failed to attain its highest ranking</a>.
Musk&#8217;s intoxicating vision of a future marked by pollution-free electric cars and clean energy has kept Tesla shares in a unique category since its 2010 IPO.
<a href="http://www.forbesafrica.com/cover-story/2015/10/01/teslas-secret-formula/" target="_blank" rel="noopener noreferrer">Tesla&#8217;s secret formula</a>
For those who <a href="https://www.forbes.com/sites/alanohnsman/2017/06/08/elon-musks-goals-for-tesla-will-require-billions-more-in-capital-investors-cheer/#1b5aa8379d80" target="_blank" rel="noopener noreferrer">embrace Musk’s vision</a> and think that within a few years Musk&#8217;s aggressive multi-billion dollar capital expenditures will finally pay off and that Tesla will be pumping out sleek electric vehicles at an annual clip of a million or more, the stock probably looks like a bargain right now.
But view it as a conventional carmaker, and the valuation for a company with just two profitable quarters in seven years and massive capital needs for the foreseeable future looks nonsensical.
Both views ensure that volatility will remain a constant. &#8211; Written by <a class="link preload-hidden ng-binding" href="http://www.forbes.com/sites/alanohnsman/" target="_blank" rel="noopener noreferrer">Alan Ohnsman</a>, FORBES STAFF

Tag: electric vehicles

FORBES AFRICA SOCIAL MEDIA

Volkswagen Is The Latest Carmaker To Accelerate Its Electric Vehicle Ambitions

A Bottom-Up Approach To Cheaper, Next-Gen Electric Vehicles

Tesla Loses ‘Most Valuable U.S. Carmaker’ Crown As Stock Takes $12 Billion Hit