In a candid and wide-ranging address at the IAA Mobility Summit 2025, Volkswagen Group CEO Oliver Blume laid out a pragmatic roadmap for the automotive giant’s future, touching on electric vehicle targets, expansion plans in India, and the evolving profitability landscape for its luxury brand Porsche. His remarks reflect a shift from idealism to realism as the company navigates regulatory pressures, market dynamics, and global economic headwinds.
Blume’s statements come at a time when automakers worldwide are grappling with the dual challenge of transitioning to electric mobility while maintaining profitability and scale. Volkswagen’s recalibrated stance signals a more nuanced approach to sustainability, growth, and innovation.
Key Highlights From The CEO’s Address
- Full transition to 100 percent electric vehicles in Europe by 2035 deemed unrealistic
- Volkswagen exploring strategic partnerships for volume segment in India
- Porsche’s 20 percent profit margin goal considered unattainable in current market conditions
- Focus on affordable electric mobility through small car family across brands
- GST reduction in India seen as a major incentive for EV rollout
Electric Vehicle Targets Face Reality Check
Blume acknowledged that while Europe’s regulatory push toward full electrification by 2035 is ambitious, achieving 100 percent EV penetration across all segments is unlikely. He cited infrastructure gaps, affordability challenges, and consumer readiness as key hurdles.
Volkswagen continues to invest heavily in its electric portfolio, including the ID. series and the SSP platform. However, the company now favors a more balanced transition, combining battery-electric, hybrid, and low-emission internal combustion vehicles to meet diverse market needs.
This recalibration aligns with broader industry sentiment, where automakers are urging policymakers to consider practical timelines and regional disparities in EV adoption.
India Emerges As A Strategic Growth Market
Blume’s remarks on India were notably optimistic. He described India as a “fascinating and fast-growing market,” now the third largest globally. Volkswagen is actively evaluating partnerships to enter the volume segment with affordable electric vehicles, particularly in the small car category.
The company showcased its electric urban car family at the summit, including the ID. CROSS Concept SUV, Skoda Epiq, Volkswagen ID. Polo, and CUPRA Raval. These models are designed to offer sustainable mobility at competitive price points.
India’s recent reduction in GST on electric vehicles has further boosted Volkswagen’s interest, making the market more attractive for entry-level EVs. The group is also considering expanding its premium and luxury offerings, including Audi and Porsche, in India.
Porsche Profit Margins Under Pressure
On the luxury front, Blume addressed investor concerns about Porsche’s profitability. He stated that the brand’s historical 20 percent profit margin is no longer feasible given current economic conditions, supply chain constraints, and rising input costs.
While Porsche remains a cornerstone of Volkswagen’s premium strategy, the focus is shifting toward maintaining brand equity and innovation rather than chasing aggressive margin targets. The company is investing in electrification of its luxury lineup, including the Taycan and upcoming electric Macan, but acknowledges that profitability will be moderated in the near term.
Volkswagen’s Broader Strategic Vision
1. Continue developing affordable electric vehicles for global markets
2. Strengthen regional partnerships to localize production and distribution
3. Balance sustainability goals with economic viability across brands
4. Invest in digital ecosystems and autonomous driving technologies
5. Maintain brand differentiation while adapting to changing consumer preferences
Volkswagen’s updated strategy, dubbed “Mobility for Generations,” emphasizes resilience, adaptability, and financial robustness. The group aims to be a global technology driver by 2035, but with a flexible and region-specific approach.
As the automotive landscape evolves, Volkswagen’s leadership is signaling a shift from rigid targets to dynamic execution—one that blends ambition with realism and innovation with inclusivity.
Sources: Economic Times Brand Equity, Volkswagen Group Strategy Page, Volkswagen Newsroom
