Volkswagen plans to invest 180 billion euros ($192.76 billion) during 2023-207 in areas including battery production and its North American operations.
Volkswagen has a target of 50 percent electric vehicle (EV) sales globally by 2030. Volkswagen is keeping over two-thirds of the five-year investment budget towards electrification and digitalisation up from 56 percent in a five-year plan it had released a year earlier.
Volkswagen Group remained BEV market leader in Europe and increased China deliveries by 68 percent in 2022, with strong demand for its highly competitive, unrivalled e-model range.
Volkswagen said BEV deliveries rose 26 percent in 2022, with further significant models to be released in 2023. Volkswagen said BEVs accounted for a record 7 percent share of total deliveries. BEV deliveries in US were up 18.8 percent to 44,200 units, with the Group ranking #4 overall in the all-electric segment.
BEVs now account for 16 percent of the Group’s order book – a sequential increase over 2021 reflecting the strategic priorities of the Group.
Volkswagen Group’s three best-selling BEVs in 2022 were (in units):
Volkswagen ID.41/ID.5 193,200
Volkswagen ID.32 76,600
SKODA Enyaq iV (incl. Coupe) 53,700
In the latest investment plan, 15 billion euros is ringfenced for battery plants and raw materials, with the company focusing first on securing the raw materials it needs and then on building new sites.
The car maker said 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.
Volkswagen Board member Thomas Schmall said on Monday the car maker was covered in Europe by the three plants in the works and was in no rush to pick new sites. It also announced its first North American plant in Canada, due to start production in 2027.
Investment in combustion engine technology will peak in 2025 and decline from then on.
The investment decisions are targeted towards fulfilling a 10-point plan developed by Chief Executive Oliver Blume after he took the helm of the automaker in September.
Volkswagen this month issued an optimistic outlook for the year ahead, forecasting a 10 percent to 15 percent rise in revenue on 14 percent higher deliveries despite supply chain challenges.