Our #WayToZero - The Decarbonization Of Mobility

Climate protection is a topic of global focus. U.S. President Biden has made fighting the climate crisis a top priority. On his very first day in office, the United States rejoined the Paris Agreement. By 2030, the United States aims to at least halve its CO2 emissions compared with 2005.

Last week Europe’s New Green Deal was confirmed. Also by 2030, the EU aims to cut its greenhouse gas emission by at least 55 percent of the 1990 value. Until now, the target had been a reduction of 40 percent.

Climate protection around the world gains momentum. And we are part of it. Volkswagen was the first auto maker to commit to the Paris climate goals. We intend to make Volkswagen net carbon neutral by 2050.

Volkswagen is taking responsibility

Because: With size and success comes responsibility. 2020, the Volkswagen Group’s global carbon footprint was 369 million tons. If Volkswagen were a country, it would rank alongside the United Kingdom as the tenth largest emitter. With 60 percent of Group sales, the Volkswagen brand accounts for the largest share of this CO2 footprint. Therefore we will continuously decrease our carbon emissions through 2050.

WayToZero: our route to sustainable climate protection

We have set ourselves a new, ambitious goal that we have presented today for the first time:

In Europe, we want to reduce CO2 emissions over the entire vehicle life cycle by 2030 by 40 percent compared to 2018. That means an average reduction of 17 tons of CO2 per vehicle. With this, the Volkswagen brand goal is even ten percentage points above the Volkswagen Group target for 2030.

We are already making good progress. Despite the coronavirus pandemic, we’ve kept our promise. We outperformed our European CO2 fleet targets by 6 million grams in 2020. With the further expansion of our ID. family, we will achieve our fleet CO2 targets this year as well.

Levers

Volkswagen is on the #WayToZero – irreversibly and with determination. The WayToZero is our holistic plan for decarbonizing our company. It consists of a large number of specific projects and measures that make up four main levers:

?            Accelerating electrification

?            Carbon-neutral supply chain and production

?            Green electricity throughout a vehicle’s use phase

?            Second life for batteries and recycling 

Lever 1: Accelerate fleet electrification

Before all other large car makers, believed in e-mobility. We had the courage to take the lead back in 2015 – and what seemed bold at the time, was the right decision. As we can see these days, almost all other car manufacturers are now following suit. E-mobility has won - and there’s no turning back. Great news for the climate.

The Green New Deal has substantially increased Europe’s climate targets. We welcome this development. The goal of achieving climate neutrality throughout the EU by 2050 will attract billions in investment and create new future-proof jobs. It could become a modernization program for Europe. Our Zwickau factory, which has been fully switched to e-mobility, is a great example.

For us, the European Green Deal means: we need to increase the share of electric sales in 2030 from 35 percent to 55 percent. This is more than 300,000 additional units each year. The capacity of an entire factory. However, we’ve set ourselves an even more ambitious target: By 2030, at least 70 percent of all new Volkswagens in Europe – and more than half in North America and China – will be electric vehicles.

With our ACCELERATE! Strategy, we are stepping up the pace. In Europe alone, Volkswagen will deliver up to a million electric cars in 2030. By then, 9 of 14 Volkswagen models will be fully electric. We will launch at least one new electric model every year. We’ve made a dynamic start to 2021. Following the ID.4, we are now launching our electric performance model, the ID.4 GTX which we unveiled yesterday. ID.6 X and ID.6 CROZZ are our first MEB vehicles developed specifically for the Chinese market. The ID.5 will be launched at the end of 2021 – initially in Europe. In 2022, the ID.BUZZ will represent the electric reincarnation of our iconic brand. And our small electric Volkswagen for the entry-level segment will follow in 2025.

All these models are based on the MEB, our e-mobility platform. The speed at which we are now launching new electric vehicles in all sizes and even in regional variations shows just how much potential the MEB has. I’m confident that the MEB will become the industry gold standard for electric drive systems.

Lever 2: Reduce CO2 in supply chain and production

The second lever is the reduction of CO2 in the supply chain and production.

The largest contributor to CO2 emissions is the energy-intensive battery production. The main lever here is the consistent use of green electricity.

We systematically identify the most CO2-intensive material groups in all vehicle projects and try to find greener alternatives. Alongside the focus on high-voltage batteries, we are also looking at things such as cell production, battery housings, wheel rims and aluminum production. In this way, we’ll be able to improve the carbon footprint of the ID. family by around 2 tons per vehicle by 2025.

Our program to decarbonize supply chains makes CO2 a core aspect of our procurement process. In tenders, we specify the use of green electricity by suppliers or set binding target values for components. 

With our “2gether Zero” program, we are also helping suppliers in developing countries to increase their use of renewable energies. 

Production

By 2025, we aim to have reduced CO2 emissions by 50 percent per vehicle compared with 2015.

In our “Zero Impact Factory”, we look for the biggest CO2 emitters at our sites – and find better, greener alternatives.

We are also gradually switching our energy supply to renewables. The conversion of our power plant in Wolfsburg from coal to gas is proceeding at full speed. It’s a highly complex project. Its CO2 emissions will be reduced by 60 percent from 2023. This equates to the annual CO2 emissions of about 870,000 combustion vehicles. Of course, that’s not the end of the road but an important milestone.

We’ve also made considerable progress at our other plants. Since 2020, 11 of our 16 plants worldwide have been fully powered by green electricity. Already today, all the purchased electricity at our European sites comes from renewable sources. This includes our Zwickau plant, which we are transforming into Europe’s largest electric car factory. In the near future, 330,000 electric vehicles will roll off the production line in Zwickau.

All the MEB production sites in Europe are carbon neutral from the start of production. Chattanooga, too, will run on green electricity once we start production of the ID.4 in 2022. Today, a large solar installation delivers part of the site’s energy requirements.

From 2030, all plants in Europe, South America, Africa and the US will run 100 percent on green electricity.

Where CO2 emissions are unavoidable in the supply chain and production, we will compensate for them with certificates from rainforest protection programs or renewable energy projects. Since the first ID.3 was delivered in 2020, we offset over 1.8 million tons of CO2.

Lever 3: Support investments in renewable energies

Volkswagen is systematically reducing CO2 emissions in the supply chain and production. These are great strides on the WayToZero. However, we’re still only half way there.

The supply chain and production only account for about half the carbon footprint of an ID. model. The other half results from the vehicle’s use. In other words, e-mobility can only make an effective contribution to climate protection if electric cars are consistently charged with green electricity. The transformation of mobility and the energy transition are therefore two sides of the same coin.

Today, Volkswagen drivers can purchase green electricity from Elli and charge their cars via their own wallbox. Through Elli and our We.Charge service, we today offer our customers a network of 200,000 charging points. IONITY has installed 330 fast-charging stations along Europe’s highways - from Norway to Sicily. Technically, this means that a fast-charging option is available every 120 kilometers in Europe.

However, green electricity isn’t available at all charging stations. While IONITY itself uses green electricity, other associated operators don’t.

We want to help here. And we want to help at scale. In terms of magnitude, our third lever is unique in the automotive industry.

Volkswagen is the first car maker to support investments in the production of renewable energies at industrial-scale. By 2025, we will contribute 40 million euros to new wind farms and solar plants in Europe.

E-mobility must not compete against existing demand for green electricity, so it makes sense to promote the creation of additional capacities. We will supplement the power consumption of the ID. family that customers cannot yet meet with green electricity by incentivizing the construction of wind farms and solar plants across Europe.

Between 2021 and 2025, all projects combined will generate around seven terawatt hours of green electricity.

In 2025 this will be equivalent to the capacity of more than 300 new wind turbines. By way of comparison: this would cover the annual demand of more than 600,000 households.

In collaboration with energy supplier RWE, we will kick things off in 2022 with a solar plant in Germany. Technically, this project alone could supply 50,000 households with electricity.

We think and act regionally in all our project decisions. Our focus is on building resources where they are actually needed in Europe. For this reason, we support projects in those regions with the highest sales of Volkswagen electric vehicles.

Lever 4: Second life and recycling

However, we’re not through with decarbonization at the end-of-life. That’s where our fourth lever comes in: the second life for batteries and their recycling.

The battery accounts for 40 percent of the value added in an electric vehicle. We guarantee the performance of our batteries for 8 years or 160,000 kilometers. However, of course, our batteries are designed for much longer life. Depending on their residual capacity, they can start a second life as an energy storage unit in a charging column. Only then will they be recycled.

At our pilot battery recycling unit in Salzgitter, we’re already working on the reuse of old electric batteries. The goal is to achieve a closed loop with 90-percent reuse of valuable raw materials.

This pioneering project is the area of expertise of our colleagues at Volkswagen Group Components.

Other measures to reduce CO2

A 360-degree analysis of CO2 emissions also involves every single one of us at Volkswagen. We have great potential to reduce CO2 in our organization of 185,000 people.

I was very happy to see how committed the whole Volkswagen team was in our “Project1Hour” on Earth Day last week. Electric company cars, digital meetings instead of traveling, eating less meat or even going vegan, buying regional products, switching to green electricity at home: everyone at Volkswagen is aware of their carbon footprint, everyone wants to reduce it, and everyone wants to contribute to climate protection. We all at Volkswagen are on the WayToZero.

WayToZero is gaining momentum

As you can see, the WayToZero is far more than just a program. It reflects our company’s approach to climate protection and has become a part of our culture. We are living up to our responsibility by setting ourselves binding targets. And we must be measured against those.

Sustainability will become a crucial factor in corporate success. In the future, employees, customers and investors will give preference to those companies which place their social and environmental responsibility at the heart of their business.

However, Volkswagen cannot shoulder the decarbonization of mobility on its own. This is a joint effort. Government, industry and society need to come together to discuss innovative ideas, find new solutions and make courageous investments.

America, China, Europe, Volkswagen - the topic of climate protection is gaining momentum. It’s great to see more and more nations and companies going “all-in”.

Personally, this makes me optimistic. We are on the WayToZero. Irreversibly and with determination.

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ID.3 - combined power consumption in kWh/100 km (NEDC): 15.4-13.1, CO2 emissions in g/km: 0; efficiency class: A+

ID.4 - power consumption (NEDC) in kWh/100 km: 16.9–15.5; CO? emission in g/km: 0; efficiency class: A+

ID.4 GTX - combined power consumption in kWh/100 km (NEDC): 19.1-18.1, CO2 emissions in g/km: 0; efficiency class: A+

ID.5: Vehicle is not offered for sale

ID.6 X , ID. CROZZ - the car will not be available in Germany