Volkswagen Aims to Jump Start Its Electric Vehicle Innovation

Volkswagen announced last week plans to increase its focus on R&D relating to battery-powered electric vehicles as part of a greater push into the EV market.  VW has freed up €8 billion to spend on this push towards electric vehicles, with much of that spending expected to be done through luxury carmaker Audi.  Patent filings show that Audi has been laying the groundwork for this move for a number of years, dramatically increasing its patent filings related to electric vehicles since 2011, and yet VW and Audi Group (VAG) still lag behind some of their competitors, who have outpaced them in this area over the same period.  In addition, some unexpected players have been investing heavily in this sector over the last few years and threaten to shake up the industry.

With such a vast amount of additional funds being committed to this developing market by VW, and with an increasing list of competitors who seem to have the early advantage when it comes to patent filings, we expect to see VW and Audi Group accelerate its trend of increased patent filings relating to developments in electric vehicles.

Charging Ahead

After years of scepticism from car manufacturers and the public, recent years have seen a sharp upturn in interest in electric vehicles around the world, led by companies like Elon Musk’s Tesla.  While longstanding problems like range anxiety persist and have prevented electric vehicles from really taking off, the market share of EVs has steadily crept up since the introduction of the Tesla Roadster in 2008.  Reports show that one in every twelve new cars sold in the UK towards the end of last year was electrically powered.

Patent filings show that the leading car manufacturers have chased this trend, dramatically increasing innovation in this area since 2011.  Japanese manufacturers, such as Honda and Nissan, have led the way in terms of patent filings since then, while some unexpected players have also invested heavily in the industry.  Samsung and Sony have been expanding their patent portfolios to cover electric vehicle technologies and could yet be a thorn in the side of VW as it attempts to push into this market.  Additionally, the patent-savvy Dyson recently announced a £2 billion investment in electric vehicle tech, and the open secret that is the Apple car continues to threaten to do to VW what the iPhone did to Nokia.

Indeed, examples like the telecoms industry have shown that market leaders who fail to innovate can and often do find themselves left behind, and the progress by these competitors and new market entrants threatens the established dominance of the European manufacturers.  While Audi has dramatically increased its patent filings relating to electric vehicles, showing its increase in interest in this sector, and some cross-licensing between Audi and VW may be expected, VW have simply failed to keep up with their competitors.  Falling behind in terms of their patent portfolio poses a serious risk that they could be left at a serious competitive disadvantage for many years.

A Resurgent Volkswagen

The announcement of €8 billion of additional investment in its push into the electric vehicle market by VW signals that it is now taking an electric vehicle future much more seriously.  This also mirrors moves by other European manufacturers, such as Mercedes, who unveiled its first fully-electric vehicle at the end of 2018.

With this new concerted effort to expand its influence in the EV market, we expect that VW will react to the progress made by its competitors and seek to flesh out its own patent portfolio to protect its investment in this industry and to safeguard its status as a major global automobile manufacturer.