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Volkswagen is accelerating its plans for fully electric vehicles in order to become “the world’s most coveted brand for sustainable mobility,” a title that probably already belongs to Tesla.
The German automaker said Friday morning that more than 70% of its Volkswagen brand’s European sales will be electric vehicles by 2030, compared to an earlier target of 35%. In the United States and China, half of all sales are expected to come from electric vehicles by then.
“We are accelerating the pace,” said Ralf Brandstaetter, who runs the Volkswagen brand, in a statement. “In the coming years we will change Volkswagen like never before.” The company also owns Audi, Lamborghini, Porsche, and several other luxury brands. However, Friday’s announcement applies to VW brand vehicles, including Passat and Jetta.
Volkswagen plans to spend around 16 billion euros on investments in future trends such as “electromobility, hybridization and digitization” by 2025. The automaker also plans to make autonomous driving functions generally available by 2030.
Volkswagen is the youngest automaker to accelerate or announce a switch from vehicles with conventional internal combustion engines to fully electric motors. Volvo announced earlier this week that it would not start offering electric vehicles until the end of the decade, while General Motors announced it would become an all-electric automaker by 2035. Stellantis, the product of the merger between Fiat Chrysler and PSA Groupe, plans to have fully electric or hybrid versions of all vehicles in Europe by 2025.
While such goals may seem a long way off, traditionally it takes automakers five to seven years to develop and bring a new vehicle to market. Electric vehicles are expected to shorten this time frame as they require fewer components than traditional gas-powered cars and have some of the same parts that can be used to build them.
The announcements follow investor optimism in EV startups as well as a surge in Tesla shares over the past year that made the California-based company the world’s most valued automaker by market cap.
Government incentives and the tightening of CO2 emissions targets are causing automakers to release electric vehicles more than customers ask of them. According to IHS Markit, electric vehicles accounted for around 3.3% of the 76.5 million vehicles sold worldwide in 2020. The research firm predicts that electric vehicle sales will rise to 12.2 million in 2025, an annual growth of almost 52%.