Covid will boost electrification shift, VW and Bentley execs say

London – Government incentives and automaker investment decisions resulting from the coronavirus pandemic will accelerate the move to electrification, Volkswagen Group executives said.

"Certainly you're going to see a faster transformation to electric mobility," Christian Dahlheim, VW Group's head of sales, told an online summit hosted by the UK auto association, the SMMT, on 23 June.

The move will be driven partly by the public's desire to see the continuation of cleaner air experienced during the lockdown as life returns to normality, Dahlheim said.

Increased government incentives "will push us in that direction," he said.

Adrian Hallmark, who heads VW Group's Bentley ultraluxury brand, said the pandemic could be a "natural accelerator" for electric investment as automakers are forced to make tough spending decisions to repair damaged finances.

"If you have to prioritise and the future is uncertain, where do you place your bets? More [internal combustion engine] horsepower or more cell technology? We have done the latter," Hallmark told the conference.

Bentley has said it will launch a full-electric car by 2026 and offer a hybrid version of all its models by 2023. However, Hallmark told Automotive News Europe in an interview earlier this month that the immediate effect of the coronavirus was to temporarily freeze the company's investments in future projects such as the electric car.

"The short-term shock doesn't help because we did plan to generate more cash to be able to pre-invest in the next generation [models]," he said. "But it didn't change the strategic direction."

Sales of plug-in hybrid cars in Europe were already on the rise in 2020 as automakers introduced more versions to help meet tougher CO2 reduction targets imposed by the EU.

Sales of  full-electric vehicles and plug-in hybrids doubled to 167,132 cars in the first three months compared to the same period last year, according to industry association ACEA.

Recent government incentive packages in France and Germany to boost demand for autos are heavily weighted toward promoting sales of plug-in hybrids.

Dahlheim said sales of full-electric cars will be dampened by the slow rollout of charging facilities. "Half of our consumers are willing to drive electric, but the biggest hurdle is infrastructure," he said.

The VW Group plans to invest €33 billion across its 12 brands by 2024 in a push to become the world's largest electric car maker. VW brand alone has said it will invest €11 billion as it aims to produce 1.5 million electric cars a year in 2025.

The VW brand will begin European deliveries of the battery-powered ID3 compact hatchback in September, the first car on the automakers' MEB electric platform. The ID3 is a key launch for VW because it's the first of a new generation of affordable, long-range electric cars.