volkswagen screams the quiet part out loud about ev profits
There’s a quiet reality sitting underneath the electric vehicle push that most automakers would rather not talk about: the math still doesn’t compute the way it does for gasoline cars.
Volkswagen is now shouting the quiet part out loud.
According to reporting from Automotive News, the German automaker admits its current EV lineup generates only about 70% to 80% of the profit margins of comparable internal combustion models. Put another way, if a conventional crossover like a T-Cross earns roughly $10,000 in profit, the electric equivalent built on today’s MEB platform might bring in something closer to $7,500.
That’s not catastrophic, but it’s not really sustainable either-not if EVs are supposed to replace the core of the business.
volkswagen screams the quiet part out loud about ev profits
Like most global automakers, VW is building electric vehicles to satisfy a mix of regulatory pressure and long-term strategy. European emissions rules, in particular, aren’t optional like they’ve become in America. The company is reportedly facing potential penalties in the range of €400 million to €500 million annually between 2025 and 2027 if it fails to meet CO2 targets. With VW’s CFO, Arno Antlitz, already warned about money problems on the automaker’s latest earnings call, this isn’t going to help matters much.
So the company is left balancing two imperfect options: build more EVs that don’t make as much money, or build fewer and pay the fines. Doesn’t this all sound a bit like running in place?
The real fix, at least in Volkswagen’s view, won’t arrive until the end of the decade. That’s when the long-promised Scalable Systems Platform-SSP, in VW shorthand-is expected to finally come online. Originally targeted for 2026, SSP has slipped, and with it, the company’s timeline for achieving something closer to margin parity between EVs and combustion vehicles.
volkswagen screams the quiet part out loud about ev profits
SSP is meant to consolidate the VW Group’s current patchwork of platforms-MEB for mainstream EVs, PPE for higher-end models like the Porsche Macan, and the incremental updates in between-into a single architecture. It will also incorporate software elements developed in partnership with Rivian, which Volkswagen sees as a way to streamline both development and long-term operating costs.
That’s the theory, but Volkswagen still has to sell cars in the meantime in order to keep the lights on.
Models like the upcoming ID. Polo, priced at €24,995 (about $29,000), are intended to widen EV appeal and convince Europeans to not buy one of those interloping Chinese EVs. But the sketchbook is shaded with red outside Europe, particularly in America.