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Volkswagen Cuts Costs, Targets Electric Future

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Volkswagen Cuts Costs, Targets Electric Future

On Saturday, Volkswagen AG (OTC: VWAGY) announced it was considering further cost cuts in order to cope with the downturn. The following is a look at how the company plans to maneuver the recovery. 

Electric SUV Is A Novelty

Volkswagen's ID.4 is basically the same car as the ID.3 but with different bodywork. Volkswagen says ID.4 production will be carbon neutral throughout the entire value chain, but engineering an electric car platform is an expensive business and fears exist that the costs associated may impact the company's ability to sustain the transition to electrification. In hedging some of the risks associated with production challenges, the company made its ‘modular electric drive matrix' architecture available to its peers. Ford Motor Company (NYSE: F), for example, signed up to use VW's underpinnings.

COVID-19 Impact

Volkswagen is using a lifetime opportunity to create a new user experience and design expression in the electric era. But weak demand will likely harm the company's net liquidity. Moreover, not all group brands are expected to achieve a positive result in 2020. This does mean the main VW passenger car brand must reduce material overheads by as much as 1/5.

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The post Even Being Forced to Cut Costs Is Not Preventing Volkswagen to Go Electric Full-Speed Ahead appeared first on IAM Newswire.

Photo by Alfonso Escalante from Pexels. 

 

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Posted-In: Ford ID.3 ID.4 Modular Electric Drive Matrix VolkswagenMarkets