Volkswagen Accelerates EV Launches Till 2023 By Cannibalizing Gas Powered Models: Bloomberg

Volkswagen AG (OTC: VWAGY) is eyeing an early 2023 launch of its compact and budget electric car, priced below €30,000 ($35,800) under the VW brand, Bloomberg reported Friday. The additional push in EV models could be funded by phasing out ICE (internal combustion engines) models.

What Happened: The 2023 budget EV launch will follow the ID.5 crossover scheduled for 2021. The electric remake of the minibus could be out in 2022. Volkswagen is also planning to launch Aero, a fully electric station wagon with a 435-mile range (700 km), sometime in 2023.

The Bloomberg report claims that the German automaker plans to discontinue the mid-sized sedan, Passat, from the U.S. production line and sell only the station-wagon version in Europe. The Arteon coupe model could also be phased out.

Reports suggest that VW plans to move Passat’s Europe manufacturing out of the current Emden, Germany facility to a unit in Bratislava, Slovakia.

Why Does It Matter: In an attempt to compete with Elon Musk’s Tesla Inc (NASDAQ: TSLA) in the EV segment, Volkswagen is considering cannibalizing its gas-powered combustion-engine models like Beetle and Scirocco, in favor of the zero-emission battery-powered vehicles -- Bloomberg.

On Friday, a Bloomberg publication highlighted the difference in opinion between CEO Herbert Diess and the labor unions. Diess wants to revamp the corporate structure to improve flexibility and make Volkswagen agile and nimble. “I have succeeded in doing this in many places, but not in some, especially not yet at our corporate headquarters in Wolfsburg,” Diess said. 

Diess’ contract extension with Volkswagen is another point of contention. Currently, his contract is set to expire sometime in 2023.

Price Action: VWAGY shares closed lower by 2.34% at $19.16 on Friday.

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