Volkswagen to produce only electric cars in Europe from 2033

As automakers worldwide switch gears to adopt electric mobility, Volkswagen too is committing to a date for producing only electric vehicles in Europe. From its previous target of 2033-35, the carmaker is committing to an earlier date. In the next decade, the company is looking to narrow down the number of models on offer and raise the profit margin for all volume brands - Volkswagen, SEAT and Skoda, and commercial vehicles - to 8% by 2025.

The German carmaker is planning to streamline production and improve productivity as it battles to dominate the electric vehicle market. Volkswagen Group's premium brands like Audi and Porsche boosted the results in the first half of the year, with Audi registering a 51% jump in operating profit and Porsche up 22%, compared to an 8% drop at the Volkswagen volume brands.

The passenger cars brand saw a 5.6% operative margin in the first half of the year, up from 3.4% in the same period last year. Volkswagen brand boss Thomas Schaefer told Reuters that bringing vehicles from the volume brands into the same factory saves costs. "We have historically a lot of waste in the system we can take out."

Following this line of thinking, the Volkswagen brand would also move its production focus from concentrating on a single model per factory to "platform thinking", Schaefer said. The carmaker will use the same basic design for different models to allow economies of scale.

Schaefer added that this strategy, combined with standardising battery chemistry, was key to achieving the carmaker's goal of producing an entry-level electric vehicle for 25,000 euros or under. "If you have 30-40 different battery cell and pack formats, it's unmanageable. The focus is a clear standard across the brands, and full scale," he added.