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Volkswagen/EV Industry Idea Proposal (VOW.DE )

Volkswagen/EV Industry Idea Proposal (VOW.DE )
 

How significant is the Volkswagen MEB platform play and what does it mean for the auto industry?

Report Available: September 11, 2019

 

Blueshift’s initial research found VOW.DE near or having achieved some major milestones in its transition to battery electric vehicle (BEV) or electric vehicle (EV) production. VOW.DE’s EV program, which includes its modular electric drive matrix (MEB) platform, has taken major steps that should result in a wave of EVs hitting the market soon. The first MEB vehicles are scheduled to be exhibited at the Frankfurt Auto Show beginning Sept. 12, mass production of two models is scheduled for this Fall, and, in what could be the most important aspect of this platform for VOW.DE, a major contract with Ford was executed for the use of the MEB kit. This is all good news for VOW.DE, but the MEB program has flown under the radar since its announcement and what it means for the company that is still recovering from the “Dieselgate Scandal” is largely unknown.

 

Observations

  1. On the eve of the 2017 Frankfurt Auto Show, VOW.DE announced that it would build electric versions of all 300 of its models across its 12 brands by 2030. Some in the industry were skeptical and saw the plan for EV as a way to move away from the emissions-cheating scandal that had plagued the company and reduced sales. Others saw VOW.DE’s commitment to EVs as laying the groundwork to become the world leader in the industry, challenging TSLA for market dominance. The company’s plans are aggressive and, if successful, VOW.DE expects to produce 100,000 EVs in 2019 and 500,000 (5% of VOW.DE’s total production) in 2020.
  2. To execute a massive transition from internal combustion engines to EVs, VOW.DE engineered a new production platform called the modular electric drive matrix or the Modular Electrification Toolkit (MEB). The MEB platform is the underpinning for all or most of VOW.DE’s future EVs. The modular structure can be lengthened, shortened and used in a wide range of vehicle styles from SUVs to hatchbacks. VOW.DE has even made the MEB platform available to other auto manufacturers to gain scale and lower production cost.
  3. DE’s hard work is about to come to fruition. After factory retrofits and supplier summits, mass production of two EVs is scheduled to start this November. The company has also added battery capacity, is building EV production plants in China, and is investing $800 million in its factory in Chattanooga, TN to build a new electric vehicle at the plant.
  4. DE has also had success in marketing the MEB platform to third parties. Ford (F) and Germany’s e.Go are planning to produce EVs based on its MEB platform. F has committed to selling 600,000 EVs in Europe by 2023 based on the MEB. The company has also agreed to collaborate with VOW.DE on developing autonomous vehicles.
  5. DE faces significant challenges as it executes its EV transition plan. TSLA, the EV market leader, has had many fits and starts along the way. The auto industry and financial community are accustomed to pie-in-the-sky announcements from TSLA regarding its own production and the future of EV, making them naturally skeptical of claims from other companies. Support of EVs is fading in China and the U.S. (two of VOW.DE’s key markets) due to regulatory changes and fraud. Also, the dominant EV technology is still being debated, with the hydrogen fuel cell EV garnering some support from auto component suppliers including Bosch Limited (BOSCHLTD.NS) and Continental AG (CON-DE:XETRA). This makes for a tough road for VOW.DE’s MEB efforts with many obstacles to overcome as it attempts to achieve its ambitious goals.

 

Will VOW.DE’s EV program achieve its 2019 and 2020 goals? Will the MEB program be the catalyst the propels VOW.DE to the industry leading position in EV?  What is the expected uptake of the MEB platform from other auto manufacturers? How significant of a business could this become for VOW.DE? What kind of impact will the MEB program have on the auto industry? How will the MEB program impact VOW.DE? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Auto company executives, Electric vehicle professionals, Auto industry suppliers, and Industry specialists.  

 

Companies: Daimler AG (DAI.DE), Ford Motor Company (F), General Motors (GM), Tesla Inc. (TSLA), Volkswagen AG (VOW.DE)

 

Research Begins: August 19, 2019

 

 

To see other ideas Blueshift Research is currently working on, please click here.

 

 

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