DETROIT -- Volkswagen Group CEO Herbert Diess warned that the European Union’s proposed emissions target for 2030 is too demanding and the resulting push to EVs could make motoring too expensive for some consumers.
Diess said VW Group will be able to comply with the EU's average fleet carbon dioxide emissions of around 60 grams per km by 2030 by boosting sales of its full-electric cars to between 45 percent to 50 percent of the group's total volume. But he warned: "I am not sure how many customers could afford it."
Buyers of premium cars will be able to afford more expensive EVs, "but I am not sure about a broader customer base," Diess told reporters on the sidelines of the Detroit auto show last week.
As examples, Diess said the retail price of a VW Up minicar that could rise in price by about 3,500 euros to 14,500 euros to be compliant with the 2030 emissions target. The price for the small Polo model could rise by 4,000 euros, he said.
“I am not sure how many customers could still afford our entry level models,” Diess said.
Diess noted that France's "yellow vest" protests were sparked by a 10-euro cent increase in the price of diesel fuel.
Another implication of electrification will be the effect on jobs, Diess said.
If about half of VW's vehicle sales are electric cars, VW would have to reduce by half the number of plants building internal combustion powertrains.
This will take VW's production restructuring "well beyond what we have already began discussing with the German unions,” Diess said.
VW is well placed with its new MEB modular architecture for mass production of full-electric cars and expects between 15 percent and 18 percent of its European sales by 2025 to be battery-powered models, Diess said.
However, he sees the 2030 CO2 reduction target as "too demanding." Europe also lacks a coordinated approach to the development of a necessary recharging infrastructure, Diess said.