Today’s featured photo shows the world famous Volkswagen factory in Wolfsburg. VW is now one of the world’s biggest car manufacturers in the world but it’s worldwide headquarters are still based in the small city of Wolfsburg, where the company was founded in 1938. The VW factory complex in Wolfsburg is apparently the largest factory in the world and covers an area of over 1,000 acres, which is 3 times the size of Boeing’s factory in Everett, Washington, USA. Over 70,000 people work for VW in Wolfsburg, so not only is it the world’s biggest factory in terms of size, it is also one of the world’s biggest factories as regards numbers employed.
It is only when you look at aerial photos that you get a sense of just how big the VW factory really is. Last year, over 800,000 cars were built here and since it re-opened in 1945, over 40 million cars have been produced at this factory. Nowadays, the VW Golf hatchback is the most popular car built here and in 2003, Wolfsburg was even re-named “Golfsburg” for a month to celebrate the launch of the fifth generation VW Golf. Volkswagen also build their Passat saloon and Tiguan SUV models here but the most famous car associated with the VW factory in Wolfsburg was also the first car built here, the VW Beetle.
Only 210 cars were built before WW2 before the factory was converted to manufacture arms for the German Army. The Volkswagen factory was heavily bombed during World War 2 and only re-opened in May 1945 as the British Army needed 20,000 vehicles in order to patrol occupied Germany. Incredibly, despite the shortage of supplies in post-war Germany, almost 2,000 Beetles had been built by the end of 1945 and just 3 months later, over a thousand cars a month were being built in Wolfsburg. By 1955, over 1 million VW Beetles had been built and by 1972, over 15 million were produced surpassing the previous record holder, the Ford Model T. Production of the original VW Beetle ended in Wolfsburg in 1974 but it continued in VW’s factory in Pueblo in Mexico until 2003.
70,000 people work for VW in Wolfsburg which is an incredible proportion of the city’s total population of 125,000. The city’s low population (less than that of Cork in Ireland) is largely because it is a planned town and few people lived here until 1938 when it was founded by the Nazi party to build the VW Beetle. Back then, the town was known as Stadt des KdF-Wagens bei Fallersleben, and it’s name wasn’t officially changed to Wolfsburg until 1946 (KdF (Kraft durch Freude or Strength through Joy- Wagen being the Nazi name for the VW Beetle). Nowadays’ it is the richest city in Germany with an average GDP per capita of €120,000 largely due to the success of VW.
The VW Arena was built in only 19 months at a cost of €60 million. It opened in 2002 and has a capacity of 30,000. The VW Arena is home to VfL Wolfsburg, who won the Bundesliga in 2008. It is rarely used for international matches due to it’s low capacity but the German national team have played a number of friendlies here.
In 2017, the Wolfsburg Arena became the first stadium in Germany to replace all it’s halogen floodlight with LED’s. The VW Arena was also the first football stadium in Germany to use hybrid grass in which natural grass is re-inforced with synthetic fibres.
The VW Autstadt complex features pavilions devoted to VW Group brands including Audi, Seat, Skoda and Porsche. VW also own premium car brands such as Bugatti (based in France), Lamborghini (based in Italy) and Bentley (based in the UK) and there are also pavilions dedicated to these brands at Autostadt. It was built in the 90’s at a cost of €400m to showcase the VW brand and their cars as the other VW museum in Wolfsburg, the Automuseum, only showcases cars that have been built in Wolfsburg. The VW Autostadt complex opened in May 2000 and nowadays attracts over 2 million tourists annually.
The VW Autostadt is the most visited theme park in Europe apart from Disneyland in Paris. There are a total of 8 pavilions dedicated to VW Group brands and over 1000 old car models are on display. Autostadt also showcases 300 car models currently being built by the VW Group and customers can arrange to collect their new car here.
There are two 60 m tall glass towers known as AutoTürme used as storage for new Volkswagens at Autostadt. The two towers are connected to the Volkswagen factory by a 700 metre underground tunnel. When purchasing a car from Volkswagen, the customer can have it delivered to a local dealership or they can travel to Autostadt to pick it up.
If a customer wants to collect their car in Wolfsburg, VW supplies them with free entrance tickets to Autostadt and they can then follow on a screen as the automatic elevator picks up their car in one of the towers. The car is then transported out to the customer without having driven a single meter, and the odometer is thus on “0”. The most popular car collected at the Autostadt is the VW Golf, which is now in it’s seventh generation. VW make an electric version of their Golf model called the eGolf at their factory in Dresden and you can arrange to collect an eGolf at the Autostadt. VW is due to launch the eighth generation of their iconic Golf model next year but will not be building an eGolf version. Instead, they planned to replace the eGolf with a completely new car originally called the VW Neo but whose name was later changed to the VW iD3.
The VW iD3 is the first electric car designed by Volkswagen from the ground up to be an electric car. Previous electric models offered by VW have all been based on existing cars such as the eGolf or eUp. The VW iD3 will be the first of 50 electric models the Volkswagen Group plan to introduce by 2025 and by 2030, they hope to have electric versions of all the 300 models they currently offer.
In September 2017, VW CEO Herbert Deiss gave details of VW’s strategy plan for 2025. Partly a a result of Dieselgate in which the company were caught using software to defeat emission tests, VW now plan to spend more than €80 billion over the next 10 years developing electric vehicles which is more than any other car manufacturer including even Tesla.
Every 40 years or so, VW has produced a mass market landmark car starting with the Beetle in the 1930’s and then the Golf in the 1970’s. Only time will tell if the proposed electric VW iD3 will prove to be as iconic a car as both the Beetle and the Golf. Unlike both the Beetle and the Golf both of which were first built in Wolfsburg, the VW iD3 will be built in Zwickau using battery packs supplied from Braunschweig and electric motors built in Kassel. No official details have been released but it is rumored the iD3’s motor will produce 170 hp considerably more than the 25 hp in the original Beetle and 50 – 70 hp in the Mark 1 Golf. It is also rumored that the VW iD3 will go from 0-60 in under 8 secs which is faster than most modern cars and much quicker than the 27 secs it took the VW Beetle to get from 0-60.
You can see from this slide that VW expect to be able to get battery cells for €90/ kWh and build an EV battery system for less than €100/kWh by 2020. Notice also how the proposed MEB drivetrain to be used in the VW iD3 differs from the MQB drivetrain currently used in the eGolf. Initial VW iD3’s are likely to come with 48 kWh battery packs which is good enough for a range of 300 km and a 64 kWh pack capable of covering 400 km on a single charge. That is the same distance as from Wolfsburg to Stettin (Szczecin) in Poland, where I was headed to next. At 20 cent for a unit of electricity, that means you could collect your iD3 at Autostadt and drive to Poland for around €12, much less than the €50 or so it currently costs to travel the same distance in a petrol or diesel car.
No details of the VW iD3’s price have been announced but VW CEO, Herbert Deiss, recently said it would cost around the same as a similar diesel car. The diesel VW Golf starts at €20,000 but nobody expects the VW iD3 to go on sale for that price as it is almost half the cost of the current eGolf. But if VW want to sell 3 million EV cars annually by 2025, they are going to have to offer some models for €20,000 or less .
VW hope to have 50 fully electric and 30 hybrid electric models on sale in 2025 up from the 2 fully electric and 6 hybrid electric models they currently offer. They hope to sell 3 million such vehicles annually or 250 times more than the number they currently sell. For VW to go from selling 10,000 electric cars a year in 2018 to selling 10,000 electric cars a day in 2025 is just wishful thinking unless the cost of an electric car in seven years time is similar to that of a petrol or diesel model. In fact, I will be amazed if they even sell 3 million EV’s between now and 2025 as there is simply not enough batteries currently being manufactured. But at least the company has announced a strategy and started investing in some of their factories to produce electric cars. It took VW 10 years to build a million VW Beetles after World War 2 and I believe this is a more realistic target for the VW iD3. However, over 20 million Beetles were sold the following 20 years and the same could well happen the VW iD3.
You can see from this chart that more electric cars have been sold in Norway (population 5 million) in the last 6 years than in Germany (population 80 million). It is expected that 50,000 electric vehicles will be sold in Germany this year but that is only a drop in the ocean as 50,000 conventional cars are sold in Germany every week. Not only that but over half the EV’s sold in Germany are plug-in hybrid vehicles with both a conventional engine as well as a electric motor powered by a small battery. Some of these EV’s only have a 3 kWh battery meaning they cannot even travel 10 km on electric power yet are still classed as EV’s. Volkswagen produce 2 plug-in hybrid models, the Golf GTE and Passat GTE which have a 9kWh battery good enough for 30 km of electric travel. VW actually sell more of these hybrids in Germany (total sales 2,800 Jan-June 2018) than they do eGolfs. So far in 2018, Renault have sold more Zoe EV’s (2,600 sold between Jan-June 2018) than VW have sold eGolfs (2,500 sold between Jan-June 2018), probably because a Zoe costs on average €10,000 less than an eGolf.
I have spent the last 4 years cycling around Europe and been overtaken by an estimated 100,000 cars of which fewer than 10 were electric vehicles. Even this year, I had already spent a week cycling from London to Wolfsburg and had only come across one electric vehicle, a Mercedes Smart being charged at a lamp-post in Rotterdam. It would take me another week to cycle from Wolfsburg to Poland and yet I did not see one electric car in all that time. In all, I spent 5 weeks in Germany and only came across a total of 6 electric cars; 2 Tesla Model S in Potsdam, another 2 Tesla Model S in Dresden, a Smart EV in Stuttgart and an eGolf near Saarbrucken. Electric cars in Germany and elsewhere in Europe are a rare sight indeed so it is no wonder that even in 10 year’s time, VW still expect to sell 3 petrol and diesel cars for every electric car they sell.
In contrast to the lack of electric vehicles in Germany, I came across at least 50 Trabants on my travels. To be fair, some of these were being driven by tourists in Berlin but most of the Trabants I spotted were actually being driven by ordinary Germans. We are talking about a car that was designed in the 50’s and hasn’t been produced since 1991 yet incredibly, there are more Trabants on German roads in 2018 than there are electric cars. This one fact alone underlines the challenge facing VW and other car companies to get consumers in Germany and elsewhere to ditch petrol and diesel cars and switch to electric.
In 1989, East Germans abandoned their Trabants in their thousands and replaced them with German models, many of them made by VW.. German people are proud of their green credentials and there are wind turbines and solar panels on rooftops all over Germany. But when it comes to motoring, Germans have by and large shunned environmental cars in favor of much more powerful petrol and diesel cars. But a lot of Germans are also frugal (witness the success of Aldi and Lidl) and the reason there are so many Trabants still on the road in Germany is partly due to nostalgia but also because they are dirt cheap to run and maintain. So long as electric cars are twice or even three times the price of a similar sized conventional car, they simply won’t sell in large numbers. But if VW manage to produce the iD3 in sufficient numbers and offer it for sale at a similar price to a diesel Golf, they might just end up with a car with as big an impact on the future of motoring as the VW Beetle had in the 1950’s. Pricing will be key and if VW offer the iD3 for sale for €20,000 or less, then it will sell like hot-cakes but if they charge €35,000 like they do for the eGolf, then the average German consumer who shops in Aldi and Lidl will look elsewhere.
Building any car not just an electric car is not easy and the people in the photo above in Australia will end up waiting over 3 years before their car is delivered. But Tesla is a relatively small car company and as a result, has struggled to meet the demand for their cars. In contrast, VW is one of the biggest car companies in the world but unlike with Tesla, no-one is queuing up to buy any of their cars. No wonder as up until now, VW and other German car companies have been dragging their feet as regards electrification using high prices and long waiting lists to limit supply. As a result, VW and other German car companies cannot even sell more electric cars in their home market than the often ridiculed French company, Renault, can in Germany in 2018 so far.
Traditionally, German consumers are very loyal to German brands and I would estimate 90% of the cars I came across in Germany were from German car companies. But when it comes to electric cars, German consumers have been voting with their feet and buying the Renault Zoe electric car in greater numbers than any electric vehicle offered by a German company. Worldwide, the situation is even worse with BMW being the only German car company to make the Top 20. The VW Group currently sell around a dozen electric and hybrid electric cars but not one model has made it into the Top 20. VW may make it into the Top 20 Worldwide next year with the Audi e-Tron, which was launched in September 2018 and is currently being built in Brussels. But it will be at least 2020 before the VW iD3 and possibly the Skoda Vision E show up in the Top 20 Worldwide EV sales chart.
It seems to be a co-incidence that the VW iD3 is due to be launched in November 2019 exactly 30 years after the fall of the Berlin Wall. Indeed, it could be argued that up until now, German car companies have been as far behind some other car companies in electrifying their fleet as East Germany was behind West Germany in the 1980’s. Some would even argue, perhaps unfairly, that VW and other German car executives the last 10 years have had a mindset similar to that of the East German leader, Erich Honeker, who predicted in January 1989 that the “Iron Curtain would last 50 even 100 years more”. The launch of the VW iD3 certainly will not be as dramatic as the fall of the Berlin Wall and people will probably not even queue up to order one like they did in March 2016 to order a Tesla Model 3. But, because VW is one of the largest car manufacturers in the world,, the repercussions for the car industry if the VW iD3 is a success will be similar to that for East Germany and the other Soviet Bloc countries in 1989. In the space of a few months that year, life as they knew it changed forever for half the population of Europe. Likewise, if the VW iD3 is a success, life for the the car industry worldwide as they have known it will end up changing forever just as it did when VW launched the Beetle in the middle of the 20th Century.. Then in the 1970’s, VW launched the VW Golf and it has since gone on to outsell even the VW Beetle and some have argued that it’s superiority to the Trabant played a small part in the downfall of the Iron Curtain. But as to whether the VW iD3 goes on to be as big a landmark as both the Beetle and the Golf will depend if it is as affordable and as reliable as both those models were when they launched. VW changed the face of motoring in the 1940’s with the Beetle and the 1970’s with the Golf but will only do so in the 2020’s with the VW iD3 if they price it right and make it so affordable that even the average German consumer will want to buy one. But if they charge a premium price, like they have done for every electric model they have launched so far, then there will still be more Trabants on German roads in 2025 than there will be VW iD3’s.