“Electric vehicles for millions, not just for millionaires”

As Volkswagen battles to become a major player in a growing electric vehicle market, the German automaker’s philosophy is “electric vehicles for millions, not just millionaires”, says company executive Reinhard Fisher.

After all, Volkswagen means “people’s car” in German. (For the record, VW won’t turn away 1 percent who want to buy its vehicles, EVs or otherwise.)

But the automaker is looking to price its EV lineup for mass appeal, says Fischer, senior vice president of VW Group and VW’s North American region strategy at Volkswagen of America.

The current VW ID.4 battery-electric model is priced at $40,000. Due out is a version with less battery capacity but $35,000 sticker.

“Our goal is (a BEV model) below $30,000,” Fischer said during a Reuters automotive trends and strategies webinar. “We wouldn’t be VW if we didn’t believe in electric vehicles for everyone.”

Webinar co-participant Jonathan Weinberg of General Motors notes that his Chevrolet Bolt BEV is already under $30,000. (By contrast, the new GMC Hummer EV is $108,700.)

BEVs currently cost more than vehicles with traditional internal combustion engines. For BEVs to gain popularity in the mass market, “we need to make them affordable,” says Weinberg, GM’s chief advocate – Global Transportation Technology.

He and Fischer agree that one way to lower the prices of electrified vehicles is for automakers to diligently oversee a strong and efficient supply chain. “We need to make the supply chain more predictable and secure,” says Weinberg. “Regulatory and supply chain security is a must.”

The industry “also needs to find a new battery chemistry that requires less cobalt,” he says, referring to an expensive material used to make BEV batteries. (see graph below).

Elements

Modern automotive supply chains are vital, but sometimes fall victim to disruptive unknowns.

For example, currently “the spotlight is on what’s happening globally with the supply chain and microchip shortage” that has hampered automotive production, says webinar co-panellist Bill Schumacher, senior director global solutions for the automotive industry at software company HERE Technologies.

“Manufacturers depend on a global supply chain,” he adds, citing a complex interdependent network.

“The people who work for supply chain teams are worth their weight in gold,” says event moderator Roger Atkins, founder of consultancy Electric Vehicles Outlook.

In an effort to reduce supply costs and more predictable parts deliveries, some automakers are setting up their own supply subsidiaries. For example, GM partners with other companies in the production of batteries and microchips.

“It’s pretty radical, but we’re going to design our own chips with a partner,” Weinberg says. “They will be GM-specific and much more efficient.”

Atkins takes note of the start of the 20eIn the last century, Henry Ford created a system in which his eponymous automobile company sourced its supplies, even owning a plantation of Brazilian rubber trees for the production of tires.

No modern automaker plans to be so vertically integrated. But Atkins brings up the idea of ​​automakers owning their own mines to reduce the cost of supplying the lithium used in the production of BEV batteries.

Such a sourcing strategy would “open a Pandora’s box,” says Fischer. But, he adds, “If you fish, you need worms.”

BEV startup creators are “finding that managing supply chains is difficult,” he says. “For established companies like VW, that’s what we’re good at. One way to cut EV costs is to do some of the sourcing yourself.

Range anxiety remains a consumer concern. But that’s nothing that worries Fischer as a BEV owner.

“It’s not on my mind anymore,” he said. “I have a charger at home and I start with a full charge with a range of 300 miles (480 km).”

He dismisses as irrelevant certain discussions centered on the time required to recharge a BEV from zero to 100% capacity. Fischer’s point is that few BEV owners drain all battery power before recharging.

“As an electric vehicle owner, I can tell everyone, ‘Go ahead and buy one,'” he says.

If everyone ends up doing it, Atkins wonders if automakers can keep up with the demand.

Weinberg’s short answer: “Yes.” GM plans an all-BEV lineup by 2035.

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