Recently, the Volkswagen Group announced its november global car sales. Due to chip shortages, Volkswagen sold 616,300 units in November, down 31.5% year-on-year, for the fifth consecutive month, and cumulative sales from January to November were 8,168,800 units, down 1.7% year-on-year.
Among them, Volkswagen fell by 38% in the Chinese market in November, and the cumulative sales volume fell by 11.6% from January to November, in stark contrast to many markets around the world. In addition, Volkswagen's sales in the European market also declined.
Internal management optimization
After the sales announcement, the latest news shows that Volkswagen has begun to restructure its top management structure, and the current Volkswagen brand CEO Ralf Brandstatter will be promoted to the group's board of directors, responsible for Volkswagen's passenger car business from the beginning of next year, and replace Stephan W llenstein, the current head of Volkswagen Group (China), in charge of the China business from August 1, 2022. His current position as Chief Operating Officer of the Volkswagen Passenger Car Brand will be taken over by Thomas Schfer, current Chairman of the Board of Management of Skoda Motors, on April 1, 2022.
According to public information, Ralf Brandstatter joined the Volkswagen Group in 1993 and has been working in the Purchasing Business Unit of the Volkswagen Group and its brands for the next 22 years. He was appointed to the Volkswagen Passenger Car Brand Management Board in 2015, chief operating officer of the Volkswagen passenger car brand in 2018, and ceo of the Volkswagen passenger car brand in 2020. Choosing Ralf Brandstatter, which has a "procurement background" to take charge of its Business in China, may not exclude the Volkswagen Group's demand for cost reduction and channel optimization.
Herbert Diess, CEO of the Volkswagen Group, has been reduced and will have full responsibility for the carIAD business of the software division on the Group's Management Board from January 1, 2022. Analysts said that the crisis in the supply chain of automotive chips caused by the epidemic and the relative lack of sales of Volkswagen's ID. family electric vehicles are directly triggered by Feng Sihan's unstable position.
Accelerate electrified layouts
Volkswagen Group has promised to fully achieve carbon neutrality by 2050, and proposed to stop selling fuel vehicles in the European market by 2035, and the proportion of electric vehicle sales in the domestic market will reach 50% by 2030. It also plans to allocate 73 billion euros between 2021 and 2025 to invest in future technologies, accounting for 50% of the total investment.
There are media reports that Volkswagen will set up a European company to better develop its battery business. Volkswagen said the new company's business will cover everything from raw material processing to managing European gigafactories. Six gigafactories are planned in Europe to meet growing demand for batteries, and €2 billion (US$2.26 billion) has been allocated for construction and operation prior to the commissioning of the Gigafactory in Salzgitter, which is expected to begin production in 2025. Over the next five years, around €52 billion will be invested in the development and production of new electric vehicles.
Recently, Guoxuan Hi-Tech issued 384 million shares of A-share shares to Volkswagen China, which was listed on December 15. The number of shares held by Volkswagen China increased from 56.4676 million shares to 441 million shares, and the shareholding ratio increased from 4.41% to 26.47%, becoming the largest shareholder of Guoxuan Hi-Tech. It is reported that the issue price of 384 million shares is 19.01 yuan / share, and the total amount of funds raised is 7.303 billion yuan, which will be mainly used for the industrialization project of the new Guoxuan battery with an annual output of 16GWh high specific energy power lithium battery, the new Guoxuan material with an annual output of 30,000 tons of high nickel ternary cathode material project and supplementary working capital.
As early as May 2020, Guoxuan Hi-Tech introduced strategic investor Volkswagen China, when Volkswagen China acquired a 4.41% stake in Guoxuan Hi-Tech. In July this year, Guoxuan Hi-Tech signed a memorandum of understanding with Volkswagen Group to develop the first generation of standard batteries for Volkswagen Group, becoming the first designated developer of standard battery cell research and development. According to the strategic cooperation framework agreement reached between Volkswagen Group and Guoxuan Hi-Tech, Guoxuan Hi-Tech and Volkswagen Group will cooperate in the development of ternary standard batteries for production in Salzgitter, Germany, further explore the development of lithium iron phosphate batteries, and will build zero-carbon emission factories in Europe, and will jointly develop other potential production bases in Europe to accelerate the industrialization of standard batteries.
In addition to the standard cell development project, Volkswagen Group will also work with Guoxuan Hi-Tech to establish a new battery production center in Salzgitter, covering a battery technology center, a cell test laboratory, a cell pilot production line and a battery recycling pilot plant, laying the foundation for a cell factory for mass production in 2025. The Göttingen plant, which Guoxuan Hi-Tech previously acquired in Germany, is also likely to provide support for the Volkswagen Group. At the signing ceremony, Volkswagen Group also announced a major ambition to cooperate with Guoxuan Hi-Tech: to become one of the world's top three battery manufacturers.
In order to achieve the same goal, Guoxuan Hi-Tech is also carrying out the layout of the whole industrial chain, and is also increasing product research and development and production capacity investment. The capacity scale target has also been raised from 100 GWh in the 2020 annual report to 300 GWh. It has also invested in key links in the industrial chain such as cathode, cathode precursor, anode material, diaphragm, copper foil electrolyte and so on. Guoxuan Hi-Tech has released 210Wh/kg lithium iron phosphate batteries and JTM technology products, and successfully installed 300Wh/kg ternary high-specific energy batteries and semi-solid-state batteries.
According to the Beijing Business Daily, Volkswagen's choice to join hands with Guoxuan Hi-Tech also comes from cost pressure. To meet the EU green deal, the share of electrified vehicles in the Volkswagen Group needs to rise from 30% to 60%. This means that the Volkswagen Group needs more batteries, and in order to ensure corporate profits, controlling battery costs has become the key, and standardized batteries can effectively reduce costs, the cost of entry-level batteries can be reduced by 50%, and the cost of mainstream batteries can be reduced by 30%.
Yan Jinghui, a member of the expert committee of the China Automobile Dealers Association, said that from the perspective of scale cost-effectiveness and quality consistency, making batteries into standard parts like engines and realizing intelligent battery management will become the common technical route of car companies.
Volkswagen China's becoming the largest shareholder of Guoxuan Hi-Tech means that the Volkswagen Group has further expanded its electrification layout and gained support in terms of battery technology reserves, batteries and raw material supply. Under the trend of electrification in the future, Volkswagen China can take the lead and reduce risks in the supply of key components such as batteries. It is not difficult to see that Volkswagen may want to remedy the continuous decline in sales by optimizing management, reducing costs, and accelerating the electrification process.