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Volkswagen lays out its NEW AUTO strategy: transforming from manufacturer to software-driven mobility provider; Scalable Systems Platform

15 July 2021
 

Strong brands and the automobile will continue to play a central role in individual mobility in the future. At the same time, the Volkswagen Group’s core product—the car—and the underlying business model are changing fundamentally. The Group sees the sources of revenue will change gradually between now and 2030: from conventional combustion engine models to zero-emission electric cars, and from vehicle sales to software and mobility services, boosted by the key technology of autonomous driving.

With its “NEW AUTO” strategy, the Volkswagen Group is realigning itself and building up the new competencies this requires. In addition to software development and the capability for autonomous driving, this also applies to areas such as battery technology, battery recycling, charging infrastructure and mobility services.

SSP: The next generation of mechatronics platform. From 2026, the Volkswagen Group will bundle its future technologies on the Scalable Systems Platform (SSP). The SSP, as Volkswagen Group’s next generation mechatronics platform, will significantly reduce complexity over time.

As the successor of MQB, MSB, MLB, as well as MEB and PPE, it will extend the consolidation from three ICE-platforms to two BEV-platforms, to finally one unified architecture for the whole product portfolio.

From 2026 onwards, the Group plans to start the production of pure electric vehicles on the SSP. This next generation will be all-electric, fully digital and highly scalable. Over its lifetime, more than 40 million vehicles are projected on this basis. Like the MEB today, the SSP will be open to other auto manufacturers.

To improve and speed up its mechatronics platform competencies, the Group will invest around €800 million into a new Research & Development facility in Wolfsburg, where the core of the SSP platform and its modules will be designed.

Introducing the SSP means leveraging our strengths in platform management and building on our capabilities to maximize synergies across segments and brands. In the long run, our SSP will significantly reduce complexity in mechatronics. Thereby, it is not only a central premise to lower CAPEX, R&D and unit costs compared to MEB and PPE and to enable the Group to reach its financial targets. It particularly is the enabler to manage future challenges in vehicle development, as cars become more and more software-oriented.

— Markus Duesmann, CEO of Audi

 By combining different modules with various sizes of platform, the Group’s brands also have a number of opportunities to differentiate themselves. From 2025, Audi’s Artemis project will use significant SSP modules for the first time. In 2026, Volkswagen will introduce this technology to the high-volume segment with its first model based on the SSP: the “Trinity” project.

 

CARIAD and E3 2.0 software architecture. Over the coming years, the Group’s own software and technology company CARIAD will develop the new E3 2.0 software architecture and thus exploit synergy effects across all the brands. This standard software stack will form the technical foundation for data-based business models, new mobility services and autonomous driving (level 4) for the Volkswagen Group and its brands.

 The new software architecture enables a complete ecosystem, which will offer customers a range of software-based services throughout the full product life cycle. By 2030, the Volkswagen Group will put up to 40 million of its cars based on the new software stack on the streets of this world. The Group says it will will have the largest amount of real-time data in the whole industry, and continuously improve its products on this basis.

CARIAD has a clear schedule for the development and introduction of the software architecture, which includes a scalable operating system and cloud connection. To enable this, the company is expanding its competencies around the world.

By 2025, the proportion of internally-developed software in the car will rise from the current figure of 10% to 60%. Furthermore, strategic shareholdings and strong partnerships already cover important fields of expertise.

Battery and rapid charging. By 2040, virtually 100% of Volkswagen vehicles in all of the world’s core markets will be climate-neutral. Key to achieving this are the internal battery supply and a comprehensive infrastructure, which allows rapid and simple charging. However, energy services are also success factors and generate additional sources of income in the new mobility world.

The biggest cost in electric cars is the battery. Internal battery production, including repair and recycling, significantly reduces these costs. This is where the new “unified cell” plays a central role. The Volkswagen unified cell concept refers to a prismatic cell format adaptable to various chemistry mixes available today or market-ready at a later point in time. The unified cell is compatible to all major upcoming innovations in both product and production technology.

 From 2023, one cell—rather than several different ones—will be used in the majority of the Group’s models. High economies of scale also reduce costs.

In order to accelerate the market success of e-mobility, Volkswagen is expanding its extensive charging infrastructure with strong partners and establishing a complete energy ecosystem, with the car at its heart. The car itself will become a mobile, intelligent power bank. Whether an electric car is climate neutral depends 100% on green electricity. Here too, Volkswagen offers its own solution. In subsidiary Elli, it has an internal energy service provider for electrification on board.

Mobility services and autonomous driving. By 2030, the Volkswagen Group will also have system capabilities for autonomous shuttle fleets. It will also own some such fleets and expand its range of mobility services and financing options. Mobility as a Service (MaaS) and Transport as a Service (TaaS), fully autonomous, will be an integral component of NEW AUTO. The value chain consists of four levels: the driverless system; its integration in vehicles; fleet management; and a mobility platform for customers.

The Volkswagen Group and its strategic partner ARGO AI are already consistently pushing ahead with the development of a driverless system for autonomous shuttles. CARIAD will develop level 4 autonomous driving for passenger cars. As such, the Group will establish what it says will be the largest neural network of vehicles in the world.

With pilot projects in Munich, the Volkswagen Group is currently testing the first autonomous buses and plans to implement similar autonomous driving projects in other major cities in Germany, China and the US. In 2025, Volkswagen will provide its first autonomous mobility service in Europe, shortly followed by the US. Future revenue potentials are promising: by 2030, the total market for Mobility as a Service in the five biggest European markets will amount to US$70 billion.

In the coming years, the Group will bundle all its mobility offerings, and those of its brands, on one mobility platform. In doing so, the company plans to capture a significant share of the market and additional sales potential in this important future business. A joint fleet of vehicles, covering all the various services—from car rental and subscription to car sharing and ride hailing—will ensure a high degree of availability, capacity and rentability.