Volkswagen to invest €180bn in electric push

Volkswagen's transparent factory in Dresden

By Mark McSherry

Volkswagen said it plans to invest €180 billion over five years — with 68% of the money injected into the “future fields” of digitization and electrification.

“In total, the group is planning to invest EUR 180 billion between 2023 – 2027 in the most attractive profit pools, including in particular the group’s battery strategy, growing its presence in the North America region, increasing the competitiveness in digitalization and products in China, as well as continuing to develop the group’s leading product portfolio,” said Volkswagen.

“More than two-thirds (68 percent) of the investment will flow into the future fields of digitization and electrification.

“In the last five-year plan, the figure was 56 percent. As early as 2025, every fifth vehicle sold worldwide is expected be one with an all-electric drive.

“A major reason for the investment increase is the up to EUR 15 billion ringfenced for the construction of cell factories by the battery start-up PowerCo and upfront expenditures for securing raw materials as part of the implementation of the battery strategy.

“By 2030, PowerCo is expected to generate annual sales of more than EUR 20 billion. Additionally, there will be ongoing investments in the last generation of combustion engines.

“The peak in investment is expected to be reached in 2025, after which it will continuously decline.”

Volkswagen Group CFO and COO Arno Antlitz said: “FY22 has impressively demonstrated the robustness of our business model.

“Under challenging conditions, we delivered 572,100 BEVs and increased our overall revenues and operating profits.

“FY23 will be no less challenging in view of the overall economic developments.

“Nevertheless, our strong brands, with their convincing product offerings and the order backlog of around 1.8 million vehicles allow us to look ahead to FY23 with confidence.

“We aim to again generate robust returns in the current year. Our strong financial base puts us in a position to continue investing in the electrification and digitalization of our company, even in a challenging economic environment.”