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• The Volkswagen Group’s CEO, Oliver Blume, said the company’s strategy for electric and electrified vehicles will now heavily depend on the region it does business in.
• For the United States, he believes about 20% of cars sold will be all-electric by 2030, down from previous goals. 
• Meanwhile, the automaker is negotiating a better tariff deal with the Trump administration, which may determine future investments in the U.S.

You probably wouldn’t want Oliver Blume’s job right now.

In no particular order, the challenges the CEO of the Volkswagen Group is juggling right now include hitting reset on how it makes vehicle software, investing in new technologies like autonomous driving and electric and hybrid powertrains, fierce competition in China that’s making inroads in Europe, increased tariffs in the United States, the end of the electric-vehicle tax credits in that country, and making sure its whole portfolio of car brands stays competitive globally. 

“The automotive industry, and especially Volkswagen, have never faced so many headwinds at the same time,” Blume told reporters today at IAA Munich, Europe’s largest automotive expo.

But he said the auto show is a sign of the Volkswagen Group’s progress on several fronts, including the launch of a new family of compact and affordable EVs for Europe, like the Volkswagen ID. Cross and the upcoming ID. Polo.  

Don’t expect a similar all-electric blitz for the U.S. anytime soon, however. 

“In the U.S., we still need a very flexible product [offering],” he said. “From our side, the development of electromobility has slowed down. By 2030, we are expecting around 20% pure-electric cars in the U.S., and the rest are [internal combustion] and hybrid models.” That’s a big drop from its original target of 55% electric sales by that year. 

Call it the realities of doing business these days when regulations in the U.S., Europe and China are so far apart, and when the entire Volkswagen Group is still determining what the effects of tariffs might be.

And gone are the days when a car company like his can plan to sell the same kinds of cars everywhere—something that’s driven everything from its ill-fated push for diesels in America to its global rollout of the ID. electric cars. Now, he said, the Volkswagen Group’s products need to be more regional in their focus. 

“Our business, over decades, worked for the Volkswagen Group to develop and produce a majority [of cars] in Germany, and then bringing the cars with one standard all over the world,” he said. “This model doesn’t work anymore.” 

The Volkswagen ID. Cross Concept at IAA Munich.

Photo by: Patrick George

This has played out in several ways as of late. For China, where the Volkswagen Group was an early pioneer but has lost significant sales to new local players, it’s partnering with Xpeng for electrical architectures and other automakers to make entire cars suited to those markets. (In the West, it’s co-developing software and EV architectures with Rivian.) 

In Europe, where regulators aren’t backing down from a plan to ban the sale of new combustion-powered cars by 2035 despite significant industry protest, it’s continuing to add more new EVs across new price points. 

VW Group CEO, Porsche CEO Oliver Blume

Things have been rocky for Volkswagen’s EVs in the U.S., however. After missing months of sales over a lengthy recall, the Tennessee-made ID.4 will see a production cut as EV demand is expected to slow when the tax credits expire this month. The ID.7 sedan was canceled entirely. And the ID. Buzz van has already been called a “flop” due to its relatively high price and low electric range.

“We need to work on our costs, especially the ID. Buzz,” Blume said. He declined to elaborate on what, specifically, Volkswagen’s American electric plan may look like in the future. 

That may also depend on the Volkswagen Group’s trade talks with the U.S. government. Under President Trump, the import-heavy automaker faces stiff 27.5% tariffs on European cars and parts, which Blume said has cost it “billions” of Euros this year. While the company waits for those tariffs to fall to 15%, as Trump has pledged to do, it’s trying to negotiate a better deal. Volkswagen has promised “massive” investments in the U.S. for one, which could include a U.S. factory for Audi. 

The Scout Terra made its European debut at IAA Munich. The revived truck brand isn’t planned for sale in Europe—at least not yet. 

Photo by: Patrick George

But even if EV growth slows, Blume said he’s bullish on Volkswagen’s long-awaited hybrids in the U.S., which are set to debut in the next few years. “Where I see potential is, for example, for the new Tiguan, also offered with hybrid engines. This is a cool car for the U.S.,” he said. A hybrid version of the Atlas is also planned. And Blume said he’s also optimistic about the hybrid range-extender option from Scout Motors, which will enable those U.S.-made trucks to offer about 500 miles of range. The Scout Motors trucks will be built in South Carolina at a factory that’s currently under construction. 

However, the Scouts aren’t due out until 2027, and Volkswagen isn’t offering a timeline for when its hybrids—which it sells in other markets—might come to the U.S. And a lot, Blume said, will be decided when the Volkswagen Group understands what it needs to invest in the U.S.

“We can’t afford everything, paying tariffs and paying for this high investment there,” Blume said. “We need support, and I want to continue the very positive talks we [have had] with the U.S. government.”

Contact the author: patrick.george@insideevs.com

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