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Volkswagen is accelerating its plans for all-electric vehicles in a bid to become “the world’s most desirable brand for sustainable mobility,” a title that may already belong to Tesla.
The German automaker said on Friday morning that more than 70% of European sales of its Volkswagen brand will be electric vehicles by 2030, up from the previous target of 35%. In the US and China, it expects half of its sales to be electric vehicles for that time frame.
“We are picking up the pace,” Ralf Brandstaetter, who leads the Volkswagen brand, said 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, but Friday’s announcement applies to VW-branded vehicles, which include the Passat and Jetta.
Volkswagen said it plans to spend around 16 billion euros ($ 19 billion) to invest in future trends like “electric mobility, hybridization and digitization” by 2025. The automaker also plans to make autonomous driving functions. are widely available by 2030.
Volkswagen is the latest automaker to accelerate or announce a switch from traditional internal combustion engine vehicles to fully electric motors. Volvo earlier this week said it will only offer electric vehicles by the end of the decade, while General Motors has said it plans to 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 its vehicles in Europe by 2025.
While those goals may seem far away, traditionally it takes automakers five to seven years to develop and launch a new vehicle. Electric vehicles are expected to shorten that time frame as they require fewer components than traditional gasoline-powered cars and have some of the same parts that can be used to build them.
The announcements follow investor optimism in electric vehicle startups, as well as a surge in Tesla shares last year that made the California company the world’s top-rated automaker by market capitalization.
Government incentives and tightening CO2 emissions targets are prompting automakers to launch EVs more than customers demand. IHS Markit reports that electric vehicles accounted for approximately 3.3% of the 76.5 million vehicles sold globally in 2020. The research firm expects electric vehicle sales to rise to 12.2 million in 2025, which which indicates an annual growth of almost 52%.