This year's World Economic Forum in Davos will focus on one topic in particular: climate change. The climate cannot be saved without a corporate rethink. Volkswagen has understood this – and has already reacted.
From January 21, leaders from business, politics and society will meet in Davos for the World Economic Forum (WEF) to discuss the state of the world. Climate change is this year's overarching theme. Among others, US President Donald Trump, German Chancellor Angela Merkel and climate activist Greta Thunberg have announced their attendance. With natural disasters becoming more and more visible, WEF President Borge Brende appeals that all "world leaders must now work with all sectors of society" to address these problems. There are no alternatives for the big companies either: "The pressure from investors, legislators, customers and employees is increasing. They all expected the business community to face up to its responsibilities.Volkswagen is aware of this responsibility.
The Group is committed to the Paris Climate Agreement and is therefore also pushing ahead with environmentally friendly drive technologies and production methods at full speed. Volkswagen has committed itself throughout the Group to becoming completely CO2-neutral by 2050. The declared aim of the Paris Agreement: to limit global warming to below two degrees Celsius. One of Volkswagen's strongest instruments: the new ID.3.¹, the world's first balance sheet CO2-neutral electric car.
ID.3 marks the beginning of a new era – also in the field of sustainability – because when it’s handed over to the customer, the electric car is CO₂-neutral in balance sheet terms. Among other things, this is possible because both the production of the battery cells, as well as the energy used in the vehicle’s production are sourced from 100 percent green electricity. Volkswagen offsets unavoidable emissions with climate protection projects. During the use phase, it is up to the customer to also use green electricity for charging – Volkswagen makes suitable offers through its subsidiary Elli (“Electric-Life”).
With the ID. Charger, customers will in future be able to charge their e-cars quickly and conveniently at home. “For the Volkswagen brand, the ID.3 is the start of a major electrical offensive,” emphasized CEO Herbert Diess. The Group plans to launch up to 75 pure electric models by 2029, plus around 60 hybrid vehicles. The number of projected electric vehicles will rise to around 26 million vehicles by 2029. Volkswagen also plans to sell almost six million hybrid vehicles by 2029. Around 20 million of the planned electric vehicles by 2029 will be based on the Group’s modular electric drive system (MEB). This offensive will bring about a lasting change in the face of the vehicle fleet. “In about ten years’ time, almost every second Group vehicle in Europe and China will be an electric car. No other traditional manufacturer follows such a consistent course as we do,” said CEO Herbert Diess.
The ID. Family models are consistently designed for electromobility and optimally exploit the possibilities of this technology. The vehicles offer long ranges, plenty of space, dynamic driving characteristics and a new level of digital networking. The first model to roll off the production line at the Zwickau plant, since November 2019, is the compact ID.3, which will be launched in 2020. The SUV ID. CROZZ2, the ID. BUZZ3 and the saloon ID. VIZZION4 follow shortly afterwards. In future, Volkswagen will offer attractive electric cars in every segment – from the compact class to lifestyle vans. The other brands of the Volkswagen Group are also bringing more and more e-cars onto the market, above all the Audi e-tron and the Porsche Taycan.
For customers, electric vehicles mean driving pleasure and rapid acceleration with low maintenance and servicing costs. “The car has a great future. It will be clean and safe. At the same time, it fulfils a timeless desire that moves people: self-determination and freedom, technology, progress and prosperity,” said Herbert Diess.
The Life Cycle Assessment shows how sustainable products really are
The decisive factor is that Volkswagen does not simply build electric cars but looks at the entire life cycle from raw materials to recycling – as part of the so-called product life cycle assessment (LCA). Cell production, in particular, is still very energy-intensive today, and charging with energy produced from coal-fired power stations also puts a strain on the overall eco-balance. These are precisely the areas that need to be tackled if the electric car is to be sustainably trimmed for climate protection. This is exactly what Volkswagen does: from vehicle development to the required raw materials, from logistics to production, from the first to the last kilometer on the road, from deregistering the vehicle, to recycling. For the analysis, the life of a car is first divided into three phases. Production, the use phase and recycling. Production has three subcategories for which data is collected: Raw material extraction, component and vehicle production. The use phase is divided into fuel/electricity supply and vehicle emissions. Of course, recycling is also a major issue for Volkswagen, for example in the recycling of batteries or the reconditioning and reuse of valuable materials.
The supply chain is also important for sustainable electromobility because the production of high-performance batteries is energy intensive. This is why the production of an electric car produces significantly more CO2 than a vehicle with a conventional petrol or diesel engine – on average 1.5 times more. Compared to conventional drives, electric cars therefore have a disadvantage in the CO2 balance right from the outset. Consistent climate protection must therefore start early. Optimization of the battery becomes apparent quickly: If green electricity is consistently used to manufacture the batteries, the environmental impact drops enormously. The battery cells for the ID.3 are supplied by the Korean company LG Chem, which manufactures the cells in Europe, investing in a production facility in Poland. A long time ago, Volkswagen agreed with LG Chem that certified green electricity would be used to manufacture the battery cells. CO2 emissions from this area will thus fall to almost zero. Other focal points for CO2 reductions in the supply chain relate to steel production and the manufacture of electric motors. In the case of steel, complex processes can even lead to savings of up to 70 percent in a few years. In the case of the electric motor, Volkswagen uses recycled aluminum for the housing. The savings potential of these and other measures is still 50 percent.
Volkswagen pools battery cell responsibility into its Salzgitter plant
Since battery cells are the key component for e-mobility, Volkswagen has bundled Group-wide responsibility for development, procurement, project and portfolio management and quality assurance for all battery cells at the Center of Excellence in Salzgitter last year. Around 300 experts work there in the fields of electrochemistry and cell technology, as well as in traditional areas such as quality management, design and procurement – across Group and functional boundaries. The Group is investing almost one billion euros to set up its own 16-gigawatt hour battery cell factory with its joint venture partner Northvolt. But other measures also ensure a sustainable supply chain. “We insist on humane mining conditions at all our suppliers. For our batteries, we intend to exclusively use industrially mined cobalt. We do not tolerate companies buying cobalt from illegal small-scale mining into our supply chain,” said Frank Blome, Head of the Center of Excellence in Salzgitter. In addition, the cobalt content will be reduced in the next generations of battery cells. “Completely cobalt-free batteries are also conceivable,” says Blome.
The key word to limit climate change is decarbonisation – the reduction of carbon dioxide emissions (carbon stands for carbon). The effectiveness of all CO2 reduction measures is also reflected in the “Decarbonization Index” (DKI). This is a key performance indicator for the “Together 2025” strategy – and the goal formulated therein of becoming one of the world's leading providers of sustainable mobility.
The conversion to a CO2-neutral economy also represents a great economic opportunity. “With the strategic goal of becoming the world’s leading supplier of e-mobility, focusing on consistent decarbonization can be a strong competitive advantage,” said Georg Kell, Spokesman of Volkswagen’s independent Sustainability Advisory Board. “In any case, it offers the best way of setting the course for a safe and economically successful future together on a planet worth living on.” Volkswagen CEO Herbert Diess also stressed the strategic importance of the topic for the company: “Climate protection is not a burden, but a new opportunity for Germany and Europe. This is where the domestic market, the lead market for the new, CO2-free mobility, can emerge. Climate protection is becoming an engine of innovation and is increasingly generating competitive advantages. We can shape change in such a way that everyone can afford climate protection.”
1, 2, 3, 4 These vehicles are not yet offered for sale.
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