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Volkswagen Spending Billions on Combustion Engines Despite Calling it Outdated Technology

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The transition to electric vehicles (EVs) is not progressing as fast as some automakers had hoped. Several car manufacturers, including Volkswagen, are delaying their plans to go completely electric in the near future. Volkswagen had previously estimated that EVs would make up 80 percent of their annual sales in Europe by the end of the decade, but the reception of their ID models has prompted them to revise their strategy. The German brand will now use one-third of the €180 billion set aside for next-generation EVs in 2023 to continue developing combustion engines, with the remaining two-thirds allocated for electric vehicles. This decision was announced by Arno Antlitz, the Chief Financial Officer and Chief Operating Officer at the Volkswagen Group, who emphasized that while the future is electric, the past is not over and combustion engines will continue to play a role.

During an event in Munich, Antlitz stated that while the future of Volkswagen is electric, they are allocating a significant portion of their budget to ensure their combustion cars remain competitive. This marks a departure from their previous plan to only produce electric cars in Europe starting in 2033. Even though some VW Group brands, like Porsche, are actively developing synthetic fuels, others are exploring alternative strategies to sustain the combustion engine. For example, Bugatti is considering designing fuel stations that can be installed at owners’ homes and filled with synthetic fuel, while Lamborghini believes the combustion engine can be saved by running on sustainable fuels. Bentley, another VW brand, has delayed its goal of becoming EV-only by 2030, and Ford and Aston Martin have also adjusted their plans to go fully electric in Europe by 2030.

The hesitation of car manufacturers to fully commit to electric vehicles is driven by a variety of factors. Tightening emissions regulations require investment to make gas engines cleaner, while competition from electric vehicles produced by Chinese manufacturers adds further pressure. This has created a predicament for automakers, forcing them to reassess their strategies and make decisions that balance the demands of regulations, consumer preferences, and technological advancements. Despite the challenges, the shift towards electric vehicles is inevitable, and companies must find ways to adapt and thrive in a rapidly changing automotive landscape.

In conclusion, the automotive industry is at a crossroads as car manufacturers navigate the transition to electric vehicles while still maintaining combustion engine models. Companies like Volkswagen are reallocating their budget to continue developing combustion engines, acknowledging that these technologies will remain relevant in the near future. Other brands within the VW Group, such as Porsche and Bugatti, are exploring alternative fuels to sustain the combustion engine. However, the pressure from tightening emissions regulations and competition from Chinese electric vehicle manufacturers is forcing automakers to reevaluate their strategies and find ways to balance consumer demands with regulatory requirements. The future of the automotive industry is electric, but the path to get there is complex and requires innovative thinking and strategic decisions from industry leaders.

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