Chancellor Angela Merkel next to the first ID.3 from series production. Source: VW
Chancellor Angela Merkel next to the first ID.3 from series production. Source: VW

A new era of electric mobility has officially begun for German carmaker Volkswagen, with the first all-electric ID.3 hatchback rolling off the factory floor at the car-maker’s refurbished plant in Zwickau on the same day as Germany hiked electric vehicle subsidies, and as the carmaker looks to make EVs in the China and the US.

VW sees ID series – a range that Volkswagen intends to make in the millions – as redemption for its “dieselgate” emissions scandal, and the first of the range, the ID.3 will be priced below 30,000 euro ($A48,466 converted).

“For us it is much more than just the start of production of a car,” said VW board member Thomas Ulbrich at the live-streamed event attended by German leader Angela Merkel and Volkswagen CEO Herbert Diess.

“It is the beginning of a new era for the plant, for Volkswagen and definitely also to a certain extent for the German automotive industry as Volkswagen takes e-mobility into volume production.”

The Zwickau plant will make only electric cars, becoming the first car factory in Germany to do so.

On its way to a modern, completely CO2-neutral production of e-cars: Zwickau factory in Saxony. Source: VW
On its way to a modern, completely CO2-neutral production of e-cars: Zwickau factory in Saxony. Source: VW

VW says it also has 35,000 orders internationally for the ID.3 electric hatchback, and it intends to start pumping out as many as 330,000 electric vehicles from its carbon-neutral Zwickau assembly line from 2021.

“Volkswagen will make this technology affordable for millions of people. That’s why we are completely converting our plant here – from 100 percent combustion engine to 100 percent electric,” said Ulbrich.

While Volkswagen already makes an electric version of its Golf, the advent of the ID series has the potential to rapidly accelerate the shift to clean transport.

In addition to the ID.3 hatchback, the carmaker has several other models planned including an ID.4 electric SUV that will likely be the first of the series to reach Australia.

With this series, Volkswagen aims to sell 22 million electric vehicles globally within the next decade.

Merkel took the opportunity to pledge the German government’s support to the expansion of electric vehicles.

“We can now say that Zwickau is a pillar of today’s German auto industry and of its future. Our task as politicians is to create a framework where new technological innovations can take hold.”

Chancellor Angela Merkel: "Zwickau is the flagship of the change to e-mobility and therefore a pillar of the future of the German automotive industry". Source: Volkswagen
Chancellor Angela Merkel: “Zwickau is the flagship of the change to e-mobility and therefore a pillar of the future of the German automotive industry”. Source: Volkswagen

That support – as reported by Reuters – will take the form of a 50% increase in EV subsidies to assist Germans with the purchase of electric vehicles costing under 40,000 euros ($A64,621 at today’s rates).

The new subsidy will be 6,000 euros ($A9,690) for purely electric vehicles and 4,500 euros ($A7,269) for plug-in hybrids, and 5,000 euros ($A8,080) for those over 40,000 euros.

In addition to the increased subsidies, the German government will put 3.5 billion euros ($A5.65 billion) towards the construction of electric vehicle charging stations, 1 million of which Merkel said the country will need by 2030.

Having pegged itself as a leader in the transition to electric mobility in its home country, Volkswagen now also has world domination in its sights.

Following in the footsteps of Californian EV pioneer Tesla, the carmaker is now ramping up to start an assault on major electric vehicle market China.

According to plans seen by Reuters, the carmaker is readying two Chinese factories at which it will start EV production in 2020 with a planned production output of 600,000 electric vehicles a year – four times the amount that Tesla plans to produce from its Shanghai factory once it reaches 3,000 units a week.

In addition to Chinese manufacturing, Volkswagen is also investing $US800 million ($A1.2 billion) in a new factory in Tennessee alongside its Chattanooga facility that would build electric SUVs and the electric Kombi (known as ID Buzz) under its ID range.

In Australia, the appointment of VW Group Australia’s (VGA) electric mobility spokesperson and Group EV project lead, Kurt McGuiness to the position of deputy chair of the Electric Vehicle Council (EVC) is also positioning the carmaker as a leader when it introduces VW electric vehicles locally.

“The Electric Vehicle Council is dedicated to raising awareness of the impending influx of EVs, seeking to educate legislators and the public alike,” said VGA managing director Michael Bartsch in a statement.

“As Volkswagen brands will come to be the foremost importers of EVs, Volkswagen Group Australia willingly takes this senior role in the Council.”

“Volkswagen is a global leader in the push to electrification and Kurt’s role on the EVC Board is instrumental as a representative of the automotive industry,” EVC CEO Behyad Jafari said.

Overall, Volkswagen has committed $US50 billion ($A73 billion) until 2023 to development of its electric vehicle and digital services strategy.

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