Volkswagen Group’s ‘Tesla killer’? It’s the parts bin

INGOLSTADT, Germany — Automakers from Detroit and Tokyo, Seoul and Stuttgart and all points in between invariably introduce each new electric vehicle as their own "Tesla killer."

Despite the increased competition and a number of other problems it faces, Tesla has grown rapidly. Meanwhile, EV sales by the rest of the industry remain feeble in the U.S.

If there is an electrified silver bullet, though, it may have been forged in Wolfsburg, Ingolstadt and Stuttgart. That's where Volkswagen, Audi and Porsche have shaved off nearly a third of the costs of developing EVs.

How? By using shared platforms and modules from their existing parts bins to build a coming fleet of battery-electric vehicles. Tesla, which makes nothing but EVs, doesn't have that option.

The 2020 Audi e-tron, which U.S. dealers will begin delivering in the second quarter, is the first of what Volkswagen Group promises will be a wave of 70 electric models — 22 million vehicles globally — across its many brands over the next 10 years.

Almost all of those coming vehicles will ride on a pair of common platforms. One, known as MEB, will cover smaller EVs, mostly by Volkswagen and European brands Skoda and Seat, such as the Volkswagen I.D. Crozz scheduled to go into production and begin U.S. deliveries in 2020. The other, known as PPE, will cover larger EVs, including the Porsche Macan and future models largely from Porsche and Audi.

"Group synergies in development reduces costs by 30 percent," said Hans-Joachim Rothenpieler, who heads technical development on the Audi Board of Management. Audi plans to market its upcoming EVs at a price point roughly equivalent to the premium it used to charge for a model with a turbodiesel engine. The VW brand plans to do the same with its electric fleet, including a Golf-size EV it calls the I.D. that will be built starting this year and go on sale in Europe for under €30,000, or about $34,000.

Because Audi sits in the middle of Volkswagen Group's brand lineup — above the eponymous VW brand and below Porsche — its designers and engineers can feel free to borrow liberally from both when developing an EV. They also are free to pull pre-existing modules from Audi's own combustion engine lineup.

"You will see a lot of modules being used in the combustion engine world and in the electric world because those modules are not affected by the question of the drivetrain," said Stefan Niemand, head of electrification for Audi.

On the e-tron, Niemand said, "You see the axles, the suspension, the brake system from the Q7. You see the seats taken from the A6. You see the infotainment system taken from the A8."

On a corporate level, Volkswagen has deployed a platform strategy across its many brands for years as an effective way to shave design and supply costs from its global lineup. It's one of the main reasons the automaker has remained profitable, even through a diesel emissions crisis that has cost it well in excess of $30 billion.

Doing the same thing with its coming fleet of EVs "is not really radically different from the internal combustion world. You know, it was a very successful approach," Niemand said. "The platform of the Q7 is also used by the [Porsche] Cayenne and by the [VW] Touareg, and you will see the same for the PPE. At the moment, Audi and Porsche are building cars on this platform, and I believe in the future, there will be more brands building more brands on this platform."