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VW, Porsche and Audi face internal wrangling over next generation of electric cars

Porsche and Audi, both owned by the scandal-stricken Volkswagen (VW) group, are fighting over the means to develop and manufacture the next generation of electric cars.

Although VW has denied that this rivalry is getting out of hand in the boardroom, senior executives have told Reuters that in-house conflict, particularly between VW and its premium brands, is intensifying over which factories will develop the next-generation cars.

“There is a cut-throat battle for resources. Every brand with engine-manufacturing capacity now wants a leadership role when it comes to electric motors, battery packs and battery-cell expertise,” an executive at one of the VW divisions, who declined to be named, said.

Since returning to top-line racing three years ago, Porsche has beaten Audi to the world championship for sportscars and at Le Mans for the past two seasons.

Porsche will again seek to defend the titles in 2017 with its ultra-sophisticated petrol hybrids. Audi, whose hybrid racers showcased the group’s troubled diesel technology, has pulled out after winning the French race 13 times. 

Due to the relative simplicity of assembling electric cars in comparison to traditional combustion engine vehicles, manufacturers may not be able to guarantee the same level of employment in future, a thorny issue in an industry dominated by a workforce with multi-year collective wage agreements.

The German carmaker has been forced to cut costs in order to pay for cleaning up its emissions cheating scandal, recently cutting 30,000 jobs as part of restructuring plans. 

Executives at Audi, VW and Porsche - who all declined to be named - have said conflict between group brands is not new and healthy internal competition can push them to greater technical and commercial achievements.

However, some critics said the scramble has become more intense partly because the company last year lost a powerful central figure who controlled the balance of power between the brands, their managers and worker representatives.

That balance is now being redefined, pitting VW, one of the group’s least profitable mass market brands, against its highly profitable siblings Porsche and Audi.

VW has dismissed this analysis and denied that an unhealthy power struggle was underway at all. “This is pure speculation which lacks any kind of foundation and is something which we emphatically reject,” spokesman Eric Felber said.

A separate internal race has begun to become an engineering hub for electric vehicles, a field which includes research and development of battery cells, battery packs and electric motors, in the hope of preserving local jobs.

Porsche has developed the J1 electric cars platform, creating 1,000 jobs at its plant outside the southwestern city of Stuttgart, while the Volkswagen brand made its own MEB platform for conventional passenger cars in Lower Saxony and pledged to create 9,000 jobs in developing autonomous and electric vehicles.

The Volkswagen brand will spend €2.5bn to develop electric cars, the company said.

Audi is working on its own electric car at its Bavarian base, but it is unclear whether it will develop its own electric car platform now that the Volkswagen brand is to establish itself as a centre for battery cells, battery packs and electric motors.

Some senior executives say the fierce competition between brands is nothing unusual, while others point to press reports that appeared during the final days of VW’s future pact negotiations as an example of a more abrasive power struggle. The source of the leaks remains unclear.

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