VW wants to use part of its EV budget for development of combustion engines

IT is safe to say that the transition towards full electric (EV) is not progressing as some manufacturers expected. Several manufacturers have delayed their electrification goals.

Just last year, Volkswagen projected that EVs would account for up to 80 percent of vehicle sales in Europe by the end of this decade. However, the lukewarm reception of their ID models has led VW to reassess their strategy.

Of the 180 billion Euros (RM914 billion) budget allocated in 2023 for new-generation EVs, the German manufacturer will now use one-third of it for the development of combustion engines.

This announcement came from Arn Antlitz, Chief Financial Officer and Chief Operating Officer at Volkswagen Group. “The company aims to spend approximately 60 billion Euros (RM304 billion) to ensure our combustion cars remain competitive.”

He added, “The future is electric, but the past has not yet ended.”

Last year, VW CEO Thomas Schäfer referred to ICE as “old technology” in the context of e-fuel. He stated that synthetic fuels were just “unnecessary noise,” even though Porsche, also part of the same group, is actively involved in synthetic fuels at its plant in Chile.

Another premium brand under VW is also researching how sustainable fuels can evolve. Bugatti plans to build fuel stations that can be installed at owners’ homes and filled with synthetic fuels.

Lamborghini believes combustion engines can be saved by making them run on fuels other than fossil oil. Bentley is also exploring fuels with almost zero carbon emissions.

It is clear that more car manufacturers are reassessing their EV strategies as consumers are not yet ready to let go of ICE engines.

Manufacturers are somewhat aggressive as emission standards become stricter, necessitating investment in cleaner-running petrol engines. At the same time, the influx of EVs from China is also concerning major manufacturers.