The Decarbonization Program
At the launch of the program in 2019, the central questions were: In what areas can we reduce our carbon emissions most quickly? In what areas do we carry a particularly large responsibility? In what areas can we offer great technological solutions for cutting carbon that work with certainty? And do solutions for generating additional positive benefits exist outside of Volkswagen, too? To this end, the Volkswagen Group has defined the areas on which to focus first and with the greatest dedication:
- During the use phase: This is the phase in which customers drive their cars and commercial vehicles, generally fueled with gasoline or diesel. In 2020, this accounted for more than 75 % of carbon emissions.
- In the supply chain: In 2020, about 17 % of our carbon footprint arose from this stage.
- At production plants: Even though production-related emissions only account for about 2 % of our total carbon footprint, the Volkswagen Group can influence them directly.
- In electricity procurement: Purchasing green electricity means fewer carbon emissions. At the same time, a demand for green electricity creates an incentive in electricity markets to produce even more green electricity. And this also creates a benefit outside of Volkswagen.
At the wheel – leaving no carbon footprint behind
Worldwide in 2021, the Volkswagen Group produced and sold around 8.6 million vehicles with combustion engines. Opportunities were systematically exploited to reduce carbon emissions in the process. This means lower energy costs for our customers while at the same time enabling the Group to comply with statutory fleet consumption limits.
The carbon neutrality target, on the other hand, can only be reached through the use of renewable energies. In this respect, the potential of combustion engines is limited, as fuel from renewable sources is not available in sufficient quantities. The same is true for vehicle propulsion with fuel cells: In that field, production-ready drive technologies are lacking, as is hydrogen from renewable sources, and the necessary distribution infrastructure is not yet in place. The situation looks quite different for electric drives. Electricity from renewable sources is already being produced on a large scale, with the share of green electricity continuing to grow. The distribution network is fully implemented or under expansion. Volkswagen is therefore certain: The choice for electric cars is currently the most sensible approach to decarbonizing personal mobility since it makes it possible to switch over to renewable energies.
Efficiency is another important factor: No other concept than an electric drive uses as much of the precious energy provided at the source for propulsion. Plug-in hybrids play a special role in this. If they’re used electrically to a large extent and are powered with green electricity, they, too, can achieve significant carbon reductions.
Carbon-neutral electric cars need carbon-neutral batteries
What we’re all dreaming of: a battery for electric vehicles that’s small and light, can store a great deal of energy, charges within seconds and can also be produced cheaply and in a carbon-neutral fashion. The Volkswagen Group is working hard to make this dream come true.
Climate change, however, isn’t going to wait for us. Which is why our battery cells are already being manufactured with exclusively green electricity, making them almost carbon neutral with respect to the electric power used in production. While this isn’t yet the industry standard, we consider it logical and consistent. After all, we don’t want to undo the climate benefits of electric vehicle use through a larger carbon footprint from production.
That’s also why, from the start, Volkswagen included end-of-life considerations in its battery development: For one thing, the battery can be put to good use at the end of the vehicle’s life – as a storage unit, for example in photovoltaic systems. The battery isn’t thrown away afterwards, but recycled. The relevant plants for this are already up and running. In a few years’ time, with batteries being produced on a larger scale, the Group will be in a position to turn old into new – which will also save a great deal of carbon emissions.
Green power – for 120 factories and millions of cars
The roadmap is clear for the Volkswagen Group’s plants: By 2023, all sites within the European Union are to be fully powered with electricity from renewable sources*. By 2030, this is planned for all worldwide locations outside of China. In 2021, great progress was made in this area: The proportion of green power in electricity being purchased at EU production sites rose from 80 (in year 2020) to 96 %. There was no progress at the other global sites outside China this year.
Green electricity is also a beneficial solution for Volkswagen customers, as it makes the electric car use phase carbon-neutral. Customers can charge their cars with Volkswagen Naturstrom® – provided by Group subsidiary Elli – both at home and on the road. The principle: For every kilowatt hour consumed, the same amount of electricity from wind, solar or hydro power is fed into the grid.
Over longer distances, IONITY’s fast-charging parks offer 100 % green electricity. With IONITY, the Group is driving forward the charging infrastructure expansion on Europe’s main roads. By 2025, in collaboration with partner, Volkswagen plans to operate some 18,000 public fast-charging points in Europe. This represents a fivefold increase in the fast-charging network compared with today, covering about one-third of Europe’s total demand forecast for 2025.
*ŠKO-ENERGO by 2030
The climate-friendly way of traveling – with green electricity
Most carbon emissions arise in the use phase of a car's life. For electric vehicles, these emissions could be fully eliminated if customers charged with green electricity only. However, not all customers are already connected to green power. To close this gap, the Group is currently having as much additional green electricity generated for its customers on the European market as electric vehicles sold in this market consume during their use. The combination of this additional green electricity provided by Volkswagen and the green electricity used by customers not only renders the carbon footprint of the use phase climate neutral in theory, but in real terms, too. In other words, every pure electric Volkswagen vehicle, as compared to a conventional vehicle, saves carbon emissions – for every kilometer driven. More specifically, over a mileage of 200,000 kilometers, an ID.3 avoids more than 15 metric of carbon emissions compared to a Golf 8 TDI. A solution this effective is only offered by Volkswagen.
Focusing on the car’s lifespan
To achieve this, production at our Zwickau (Germany) plant has not only been fully switched to electric models, but operates entirely with green electricity. This contributes significantly to ensuring that electric cars become net carbon neutral along the entire value chain. Particular attention in the value chain is paid to energy-intensive battery cell production. In this area, the Volkswagen Group’s suppliers must commit to the exclusive use of green electricity. The Group applies this standard not just to Volkswagen passenger car brands but also to Audi’s e-tron models and the pure electric vehicles of other Group brands.
Once the products are in the hands of customers, Volkswagen offers many options for powering electric cars with carbon-neutral electricity. An overall package is available both for charging at home and on the road. In addition, with its global partners, Volkswagen is driving forward the expansion of public fast-charging networks.
Efficiency at all levels
To achieve comprehensive carbon neutrality, Volkswagen is also focusing on the use phase of vehicles. Green electricity is the best solution in this area. However, with insufficient quantity of green electricity available throughout the world, it’s important to use it as efficiently as possible.
First and foremost, the electric drive itself contributes to good efficiency – no other vehicle drive uses such a large proportion of output energy for propulsion. While a conventional combustion engine can convert a maximum of 40 % of the energy used into propulsion, the electric drive can convert up to 95 %.
The modular e-drive system (MEB) serves as the technical and economic backbone for the cost-efficient manufacture of efficient drives. The electric models offered by Audi, SEAT, ŠKODA and Volkswagen are based on this fundamental architecture. The platform has been developed specifically for electric cars and makes the best possible use of the opportunities provided by electromobility. For example, the models offer long ranges, plenty of interior space and dynamic driving characteristics. This goes hand in hand with a standardization of assemblies, battery systems and entire production facilities. The easy exchange between locations and flexible factory occupancy are further keys to cost-effective production with the aim of making electromobility attractive and affordable for many.
Global electric production
The Volkswagen Group’s electric vehicles are in demand the world over. That’s why it makes sense to produce them in Europe, China and the US as well. For Europe, Volkswagen, Audi and Porsche produce pure electric vehicles in their German locations in Zwickau, Zuffenhausen, Heilbronn, Dresden and soon also Emden, Hanover and Wolfsburg. ŠKODA also produces pure electric vehicles at its Mladá Boleslav site in the Czech Republic. Outside of Europe, the Group manufactures pure electric vehicles in Chattanooga (Tennessee) in the US and in Foshan and Anting in China. For this purpose, plants are either being partially or fully converted to enable the production of electric models (e.g., in Zwickau) or newly erected (e.g., in Anting).
The goal is to produce some 70 different pure electric models across the Group by 2030. The Volkswagen brand alone intends to sell more than one million electric cars per year worldwide as early as 2025 and to increase their share in car sales to 70 % by 2030.
This also entails significant transformations in component manufacturing. The Volkswagen Group Components plants are also repositioning themselves with the goal of achieving the highest possible share of the value added. They supply electric drives and platform parts for the MEB, and develop and manufacture the MEB’s battery system. In the future, the cells for inside the batteries will also be developed and produced within the Group.
Focus on batteries
The Volkswagen Group’s plans are particularly ambitious when it comes to the key component of e-mobility: the cells from which the batteries are assembled. The Battery Cell Center of Excellence bundles Group-wide expertise in this field at its location in Salzgitter, Germany, where manufacturing also takes place. The first battery cell factory of the Northvolt Zwei joint venture is being built at the same location in cooperation with Swedish battery manufacturer Northvolt AB.
This is just the beginning, because the millions of Volkswagen Group electric vehicles expected to be manufactured each year will require gigantic amounts of energy storage. To rise to this challenge, the Group is setting itself strict targets with its “Technology Roadmap for Batteries and Charging.” Its focus is on significantly reducing the complexity and cost of batteries to make electric cars both attractive and affordable for as many people as possible. At the same time, the Group wants to ensure it can meet its own demand for battery cells beyond 2025.
Therefore, six gigafactories with an annual capacity of 240 gigawatt hours are to be built in Europe alone by the end of the decade. The unit cell, a basic component that can cover 80 % of the Group’s cell requirements for the long term, will be a key player here. Volkswagen is thereby systematically focusing on the potential of e-mobility – because with 240 gigawatt hours of battery capacity, over five million ID.3s with 45 kilowatt hours of battery capacity can be produced every year.
It’s all about quantity
Many products of everyday life have only become affordable thanks to mass production. This is particularly true of the automobile. Large-scale production has enabled constant innovation without having turned the car into a luxury item. Volkswagen is investing billions in the fundamental technology shift toward e-mobility. Which is why the scale effect, i.e., cost reduction through large series, is of particular importance here.
With the modular e-drive system (MEB), Volkswagen has created a uniform architecture for the Group’s volume models. This will lower the cost of individual components. Another key to affordable electromobility for all lies in the development of battery cells. From 2025 onward, several gigafactories in Europe will therefore be producing the standard cell for Volkswagen’s volume segment, covering 80 % of the Group’s cell requirements. This again will lower costs and, in turn, make it easier for many people to switch to climate-friendly e-mobility.