Volkswagen Chief Financial Officer Arno Antlitz has announced that rising battery material costs mean it will be 2025 before the automaker can build some electric vehicles at the same profit margins as combustion models. Antlitz said that when Volkswagen launched its new electrification strategy in July 2021, it expected to reach margin parity between combustion engine and electric vehicles “within the next two to three years”.
Now, Antlitz said, rising materials costs mean the profitability goal depends on VW making its own batteries. Volkswagen is “planning for significant positive margin” on a new EV model, the ID.2, that will go into production in Spain in 2025 and be priced from 25,000 euros.
The CFO also said Eastern Europe was still likely to be the location of its next battery plant, and that it was in talks with specific locations. Volkswagen is still weighing options for converting its Wolfsburg factory in Germany to build a new generation of electric vehicles called Trinity, or building a new factory for the models.
Shareholders can expect an update on the carmaker’s financial targets and capital allocation plans at its upcoming capital markets day on June 21, the CFO added.