Volkswagen boosts investment in electric/autonomous cars
BERLIN — Volkswagen has raised its planned investment on digital and electric vehicle technologies to US$86 billion over the next five years as it seeks to hold onto its crown as the world’s largest carmaker in a new green era.
Under a plan presented on Friday, Volkswagen said it would allocate nearly half its investment budget on e-mobility, hybrid cars, a seamless, software-based vehicle operating system and self-driving technologies.
In last year’s plan, the German car and truck maker, which owns brands including VW, Audi, Porsche, Seat and Skoda, had earmarked US$71 billion for electric and self-driving vehicles out of its nearly US$178-billion budget.
A global clampdown on emissions, partly triggered by VW’s diesel pollution scandal in 2015, has forced carmakers to accelerate the development of low-emission technology, even for their low-margin mainstream models.
“The transformation of the company and its brands as well as the strategic focus on the core mobility areas will be consistently implemented,” Volkswagen’s supervisory board Chairman Hans Dieter Poetsch said.
Jefferies analyst Philippe Houchois said while the overall investment budget had remained unchanged, VW’s priorities had seen a “meaningful re-allocation to software and digitization and a continued priority on Germany.”
Volkswagen has said the European Union’s more stringent emissions targets will force it to boost the proportion of hybrid and electric vehicles in its European car sales to 60 per cent by 2030, up from a previous target of 40 per cent.
Pressure to retool factories to build electric cars has also increased after California, which accounts for 11 per cent of U.S. car sales, said in September that it plans to ban the sale of new gasolinepowered cars and trucks from 2035.
The emissions clampdown has already led Volkswagen to review the future of its Lamborghini, Bugatti and Ducati brands as it seeks to increase economies of scale for the shift to mass producing electric cars.
In its new plan, Volkswagen is doubling its spending on digitalization to nearly US$32 billion, to develop its new vehicle operating system and self-driving technologies.
More than $41 billion of the spending budget money will be invested in e-mobility and $13 billion has been earmarked for the development of new hybrid cars, it said.