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VW chair says component cost decrease keeps him confident of EV success

Volkswagen AG is in the middle of implementing a comprehensive electric vehicle strategy, one that we've been documenting for a long time. The Group stands ready to offer dozens of plug-in vehicles in the coming years if it feels there is sufficient demand and believes that selling a million EVs in Germany by 2020 is reasonable. That would be a solid number, but remember that VW sold over 5,923,000 passenger cars around the world last year, and the group as a whole sold over 9.7 million. At the company's annual Media Conference and Investor Conference in Berlin recently, the chairman of the board of VW AG - surrounded by some decidedly non-green examples of the VW Group's vehicles (some absurd new Bugatti, for example) - took some time to put the company's EV plans into focus. The upshot is that Dr. Martin Winterkorn is still guiding his electromobility ship into new waters, saying that "many more [plug-in] models will follow." Winterkorn said there are three main reasons he is confident in the ability of VW (and Audi and Porsche, at the very least) to push EV sales upward. Batteries are getting better, he said, and if the ranges can be extended, then customers are happy. But the real secret lies in reducing component costs. He said (as translated): It is important to look at the cost of the components: the battery technology, the electric motor and the electric components. Whenever you go into volume production, you of course have economies of scale. In two to three years' time, if we are able to achieve the goals we are setting for ourselves with cost and reach sufficient volume, I do believe that we can achieve two to three percent [market share] within VW Group. So, hitting a million EVs by 2020 is reachable. With the e-Golf and the e-Up off to excellent sales starts, we're willing to be confident as well.

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We're set to record Autoblog Podcast #366 tonight, and you can check out the topics below, drop us your questions and comments via our Q&A module, and don't forget to subscribe to the Autoblog Podcast in iTunes if you haven't already done so. To take it all in live, tune in to our UStream (audio only) channel at 10:00 PM Eastern tonight.
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VW still set on Phaeton redux despite cost-cutting drive and losing $32k per car

While critically well regarded, the Volkswagen Phaeton has proven to be a vehicle largely unloved by luxury buyers around the world. Despite this, it refuses to die. While VW's luxury sedan hasn't been sold in the US since 2006 due to low sales here, it has soldiered on in Europe with occasional updates. As the model's long lifespan has been winding down, VW has decided to keep pushing the Phaeton into a new generation, despite in-house alternatives like the Audi A8 and Bentley Continental Flying Spur. The move might not make much business sense, but Volkswagen executives are determined to make the Phaeton work. According to market analysts speaking to Reuters, developing the next-gen luxury sedan on the MLB platform could cost as much as 650 million euros ($737 million), despite relying on the same underpinnings in the A8. It's not like the Phaeton is leading the luxury sedan sales ranks, either. Reuters notes VW produced just 5,812 of them in 2013 (the most current year with data), and from 2002 to 2012, the automaker reportedly lost 28,000 euros ($32,000) on each example sold. Conversely, Mercedes-Benz sold 103,737 units of its new S-Class in 2014, an astonishing 82.2 percent jump over the previous year. The decision to keep the Phaeton going doesn't seem to square with the VW brand's cost-cutting strategy. Boss Martin Winterkorn announced last year a plan to save 5 billion euros ($5.7 billion) annually in the coming years. That plan reportedly also includes killing off less profitable models. Apparently, VW can't just rip off the band-aid and get rid of the Phaeton. Even some VW bosses seem somewhat perplexed at the sedan's business case. When Reuters asked the company's US boss Michael Horn about selling the Phaeton here, he said. "That's a dangerous question. It's an image bearer with no relevance for volume." The next-gen Phaeton is scheduled to go on sale in Europe in 2017 or 2018, according to Reuters, which is about a year later than previous rumors. A US launch will reportedly follow in 2018 or 2019 with the plug-in hybrid and potentially even diesel versions on offer. A starting price around $70,000 is estimated. Featured Gallery 2011 Volkswagen Phaeton View 15 Photos News Source: ReutersImage Credit: Volkswagen Plants/Manufacturing Volkswagen Luxury Sedan vw phaeton cost cutting