At the IAA Mobility show in Munich, Volkswagen Group has set out a wide-ranging programme that underlines its commitment to scale electric mobility and secure competitiveness in a tightening global market. The company has announced new models, production investments, battery technology, and energy systems alongside a significant commitment to artificial intelligence.
Expanding affordable EVs
Volkswagen confirmed that its Electric Urban Car Family will launch in 2026, comprising four models across Volkswagen, CUPRA, and Škoda. These include the ID. Polo hatchback, the ID. CROSS Concept compact SUV, the CUPRA Raval, and the Škoda Epiq. All will be built on a common MEB+ platform and are targeted at entry-level pricing starting around €25,000, with ranges of up to 450 km.
Speaking at the show, Volkswagen Group CEO Oliver Blume said: “At the IAA Mobility in Munich, we are showcasing the new power of the Volkswagen Group and demonstrating our potential as a global technology driver in the automotive industry.”
Volkswagen brand chief Thomas Schäfer highlighted the return to established naming conventions with the ID. Polo: “Our model names are firmly anchored in people’s minds. … That’s why we’re moving our well-known names into the future.”
The company also previewed a sportier ID. Polo GTI variant and an ID. EVERY1 entry model, due in 2027 at around €20,000.
Production in Spain
Volkswagen confirmed a €10 billion investment programme in Spain, covering both vehicle and battery production. From 2026, Martorell (Barcelona) and Landaben (Navarra) will produce the Electric Urban Car Family, while a new €3 billion gigafactory in Sagunto will supply batteries. The group will finance about 70 percent of the total spend.
This reinforces Spain as Volkswagen’s European base for affordable EV production, complementing its existing manufacturing footprint in Germany.
Oliver Blume and Thomas Schäfer with ID. Polo and ID. Polo GTI
Battery and charging technologies
The group’s battery subsidiary PowerCo introduced its Unified Cell concept, intended to underpin the Electric Urban Car Family. Production is beginning this year in Salzgitter (Germany) and will expand to Valencia and St. Thomas (Canada). The cell is designed to simplify production processes and cut costs across multiple models.
Volkswagen’s energy brand Elli announced a pilot for bidirectional charging in German homes. The 11 kW wallbox links home solar systems and EV batteries, allowing drivers to reduce charging costs by up to 75 percent. Elli plans to extend the system into a “Managed Battery Network” able to trade energy on European power markets.
Artificial intelligence investment
Volkswagen also confirmed plans to invest up to €1 billion in artificial intelligence by 2030, focused on product development, manufacturing processes, and IT systems. The group expects savings of up to €4 billion by 2035.
This investment is intended to strengthen efficiency in both vehicle engineering and production, as well as improve digital features across the fleet.
The Volkswagen Group stand at IAA Mobility in Munich.
Market pressures
Volkswagen’s announcements come at a time of intense competition. Chinese brands have rapidly expanded in Europe, increasing their market share to nearly five percent this year. EU carmakers are also facing new U.S. tariffs and weaker demand in their home markets.
Blume acknowledged these challenges directly, telling reporters: “The main problem is that we have many crises at the same time,” citing pressure in China, tariffs affecting Audi and Porsche in the U.S., and slowing demand in Europe.
Balancing heritage and transition
Volkswagen is aligning its product strategy more closely with its heritage brands. Established names such as Polo will be used alongside the “ID” designation for new EVs, and industry analysts expect models such as Golf, Tiguan, and Passat to follow.
The company also used IAA Mobility to show updated versions of its combustion and hybrid vehicles, including the T-Roc, Tiguan, Tayron, and Passat. This dual track reflects its need to sustain revenue from existing models while accelerating electrification.
Outlook
In the first half of 2025, electric vehicles accounted for 11 percent of Volkswagen Group’s deliveries worldwide, with growth of nearly 90 percent year on year in Europe. The company currently holds a 28 percent share of the European EV market.
By combining new affordable models, expanded production capacity, battery and charging innovation, and investment in AI, Volkswagen aims to protect that position. The scale of commitments announced at IAA Mobility demonstrates the group’s intent to drive electrification at volume and compete more effectively with both established and emerging rivals.
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