VW Sticks to E-Car Shift Despite Oil Price Slump
VW Sticks to E-Car Shift Despite Oil Price Slump
(Bloomberg) -- Volkswagen AG’s unprecedented push into electric vehicles will go ahead as planned even as an eroded oil price may make driving combustion-engine cars cheaper again.
VW will start developing its last mass-market technology for combustion-engine cars in 2026 as it expects sales of new gas-powered vehicles to begin fading out around 2040, strategy chief Michael Jost told reporters in Berlin on Thursday.
The current oil price development is “one of those dips that last a month, or some months or maybe a year,” but in the longer run oil “won’t get cheaper,” Jost said. “We have a clear commitment to become CO2 neutral by 2050 and there is no alternative to our electric-car strategy to achieve this.”
The world’s largest automaker has embarked on the industry’s most aggressive initiative to roll out battery-powered vehicles with 30 billion euros ($37 billion) in earmarked investments over five years. The German manufacturer is currently introducing the new ID.3 hatchback and will add a compact SUV sibling later this year that will be sold in Europe, China and the U.S.
Jost said VW’s electric-car push covers all major markets, but acknowledged adoption of battery-powered cars in the U.S. might take longer than in Europe and China due to current environmental policies.
Purely battery-powered cars “are the core of our strategy,” Jost said. The e-cars will be flanked by a smaller number of plug-in hybrids. The production and storage of energy from renewable sources will emerge as critical technology going forward to fight output of carbon dioxide, he said. Hydrogen won’t play a major role in cars anytime soon, but has potential for commercial vehicles, according to Jost.
Crude has lost around a quarter of its value this week as the deteriorating demand outlook due to the pandemic coincides with a price war between Saudi Arabia and Russia. The battle for oil market share intensified Wednesday after Saudi Aramco announced plans to boost oil production capacity to 13 million barrels a day and Abu Dhabi National Oil Co. vowed to pump as much as possible next month.
To contact the reporter on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Daniel Schaefer
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