"Conventional engines will remain indispensable for the foreseeable future," Volkswagen AG CEO Matthias Muller told the annual general meeting in Hanover today while also emphasising the group is "pressing ahead with the transformation of mobility".
"The future is electric. We intend to be the No. 1 in e-mobility by 2025", Muller told the meeting of 3,000 shareholders, building on remarks made earlier this week by the Volkswagen brand CEO Herbert Diess.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Muller also updated the status of efforts to deal with the diesel crisis and showed how the group was realigning for the future of mobility with its Together – Strategy 2025 programme.
"In order to provide affordable, sustainable mobility on a large scale we will continue to deploy the complete spectrum of drive types: from conventional to fully electric", Muller said. He added the 12-brand group "is sending clear signals for the expansion of e-mobility" having spent EUR3bn on alternative drive technologies over the past five years with plans to triple this in the next five years.
"This is how the group will be rolling out more than 10 new electrified models by the end of 2018. By 2025, we will be adding over 30 more BEVs," Muller said.
The newly-established Centre of Excellence in Salzgitter will bundle group-wide competence in battery cells and modules.
"At the same time, we are conducting intensive negotiations to establish partnerships in the field of battery cells in Europe and China. You will soon be hearing more about this", the CEO added.
According to Muller, modern internal combustion engines will nevertheless be indispensable for the foreseeable future.
"This applies also and especially to the Euro 6 diesel, despite the current heated debate." In total, the group will be spending around EUR10bn on these technologies by 2022.
Muller added: "The internal combustion engine primarily is part of the solution, not part of the problem. Some 124 years after it was invented, the diesel engine still has plenty of potential. And we intend to exploit that potential. By 2020, we will have made our internal combustion engines between 10% and 15% more efficient and therefore also cleaner. This will help protect the environment and conserve resources.
"We are transforming Volkswagen from an automaker into a globally leading mobility provider. Volkswagen needs to transform, because our industry will see more fundamental changes in the coming decade than we have experienced over the past 100 years."
A new era calls for new ways of thinking: "More agile and courageous. More entrepreneurial and pragmatic." He emphasised this was just as important as technological change.
"I am convinced that an open culture, strong values, and integrity in our actions are essential for the future of Volkswagen." [Strategy 2025] has a clear goal: "What sounds great on paper must become part and parcel of everyday behaviour."
Another central element of the program for the future is partnerships to develop new business opportunities or advance new technologies.
Muller said: "Part of becoming the 'new' Volkswagen involves opening up as a company. In recent months, we have forged many promising partnerships."
Muller referred to several examples such as the plans to enter the economy segment with Tata, the envisaged joint venture with JAC in China to develop attractively priced electric cars, and numerous cooperation projects in the field of mobility services.
"Building great cars is no longer enough" to secure the future. "Today's customers expect more with regard to mobility. And these new customer requirements also mean that we need to change."
Notwithstanding the diesel crisis, Volkswagen is well prepared to face fundamental change in the automotive industry, Muller said.
"In the last fiscal year, we laid the foundations for the most extensive transformation in the history of Volkswagen. And we put up an operative performance that was much better than many people had thought possible". For 2017, it's now 'full speed ahead'!"
Ahead of the AGM, investment advisory firm Hermes EOS had urged Volkswagen shareholders not to clear the carmaker's management and supervisory boards from responsibility for actions taken in 2016, citing VW's failure to resolve long-standing corporate governance and transparency issues, Reuters reported.
Hermes called on VW to publish key findings of its investigation into the emissions scandal, criticised the carmaker's efforts to improve corporate culture and demanded an independent review of its supervisory board.
"We think that Volkswagen has failed to systematically address those problems to date," Hermes, which represents large institutional investors, told Reuters on Tuesday.
