Volkswagen has spent billions investing in its shift from diesel powertrains to battery-electric, but when it comes to profitability, its executives say, what's under the hood doesn't really matter.
Thanks to the company's new global architecture, which is electrification-friendly and flexible enough to underpin just about anything VW wants to sell, company executives are confident that individual electric models will be just as profitable as those powered by fossil fuels.
"We do not expect a deterioration in margins. Our advantage is that all our brands have the same platform for electric products and the same batteries that we buy in China," VW CEO Herbert Diess told la Repubblica, Reuters reports.
This message tracks with what Volkswagen of America CEO Scott Keogh has said about the company's plans for introducing its EVs in the States. Its new compact crossover, due to debut here late in 2020 or early in 2021, should be roughly the same size—and price—as the existing Tiguan.
Keogh told Green Car Reports in Frankfurt that he expects the cost and capability between ICE cars and equivalent electrics to be "apples to apples," improve the mass appeal of EVs. For a company whose name literally means "Peoples' Car," this seems like the appropriate philosophy.
We expect that reality won't be quite so clean-cut. Looking back, VW's TDI models always carried a premium. They offered more capability in terms of efficiency and range, hence the added cost. Given the performance advantages of electric powertrains, it would stand to reason that VW's electrics will carry a similar markup.
Since it's unlikely that VW will offer ICE variants that line up perfectly with its EVs in terms of ultimate performance, buyers should be prepared for pricing that reflects capability. There's no such thing as a free lunch.