German automotive giant Volkswagen Group says it plans to spend nearly €60 billion ($A97.3 billion) over the next few years in a large-scale transition towards electric vehicles, with plans to roll out 75 all-electric vehicle models along with around 60 hybrid models.
The Volkswagen Supervisory Board discussed and approved its investment plan for 2020 to 2024, Planning Round 68, last week, and announced that its spending will be targeted on hybridisation, electric mobility, and digitalisation over the next five years – with €33 billion expected to be spent on electric mobility alone.
The planned €60 billion investment amounts to just over 40% of the company’s investments in property, plant and equipment, and all research and development costs during the planning period. Further, the investment amount represents a 10% increase over the company’s previous Planning Round.
“We are resolutely pressing ahead with the transformation of the Volkswagen Group and focusing our investments on the future of mobility,” declared Hans Dieter Pötsch, Chairman of the Supervisory Board of the Volkswagen Group. “This is part of our systematic and consequent implementation of the Group’s strategy
“We will step up the pace again in the coming years with our investments,” added Herbert Diess, Chief Executive Officer of the Volkswagen Group.
“Hybridization, electrification and digitalization of our fleet are becoming an increasingly important area of focus. We intend to take advantage of economies of scale and achieve maximum synergies.
“In light of the worsening economic situation, we are also working on increasing our productivity, our efficiency and our cost base so as to secure meeting our targets.”
The company’s five-year Planning Round 68 also impacts the company’s 10-year, long-term plan, which lays out the plan to introduce 75 all-electric models to the market by 2029, along with around 60 hybrid models.
Volkswagen Group expects its total projected sale of electric vehicles will increase to around 26 million with another 6 million hybrid vehicles sold by 2029.
As regards the company’s planned electric vehicles, approximately 20 million of the planned sales through 2029 will be based on the Group’s Modular Electric Drive Matrix (MEB). The remaining 6 million electric vehicle sales will be based on the company’s High-Performance Platform (PPE).
Volkswagen Group’s electric vehicles are expected to be built outside of Germany by the company’s plants in Mlada Boleslav, Czech Republic; Chattanooga, Tennessee, USA; Foshan, Guangdong Province, China; and Anting, Shanghai, China. However, Volkswagen nevertheless expects some of its future electric vehicles to be produced by German plants in Zwickau, Emden, Hannover, Zuffenhausen, and Dresden.
The plan to build such a large number of electric vehicles will necessitate the conversion of the company’s factories to enable them to produce EVs rather than traditional combustion engine vehicles.
Reports suggest that three of the company’s German plants will be fully converted to enable production of electric vehicles, while plants in China and the United States are either going to be fully or partially converted.