VW placing major bet on EV future

Volkswagen Group plans to invest $193 billion over the next five years, with more than two-thirds earmarked for electric vehicles and software as the automaker continues to position itself for the shift to EVs.

Oliver Blume, Volkswagen Group’s chief executive, said in a statement that its new year will be a decisive one “for executing strategic goals and accelerating progress across the group.“

According to the German company that has an assembly plant in Chattanooga, the group plans to grow its presence in North America and increase its competitiveness in China.

The company said 68% of the future investment figure is in electrification and digitalization, and that’s up from 56% in its previous five-year plan.

Volkswagen said in the statement that as early as 2025, every fifth vehicle sold worldwide is expected to hold an all-electric drivetrain.

According to VW, the group saw 26% growth in total EV vehicle deliveries in 2022 and achieved an overall EV market share of 7%. EVs now account for 16% of the group’s order book, the company said.

The group’s best-selling EVs in 2022 were the ID.4 and ID.5, a coupe version of the ID.4, at 193,200 units, and the ID.3 at 76,600 units, the company said.

In North America, Volkswagen cited the first ID.4s rolling off the production line in Chattanooga in 2022 and the announcement of the Scout brand to deliver its first all-electric vehicles in 2026 from a new plant in Columbia, South Carolina.

Overall, EV deliveries in the U.S. were up 18.8% to 44,200 units, with the group ranking No. 4 overall among automakers in the all-electric segment. The group said it has 4% market share, including conventionally powered vehicles, which it aims to increase to 10% by 2030. In large part, the increase will be driven by the expansion of products, including the debuts of the ID.7 and ID. Buzz in 2024.

Although overall delivery numbers of all Volkswagen Group vehicles globally declined 7% to 8.3 million vehicles in 2022, operating margins before special items grew to 8.1% in 2022, according to VW. The company cited the group’s continued pricing discipline, cost progress and stronger model mix.