“We must transform:” VW ramps up EV investment after one more roll of the Ice

Volkswagen Group has announced it will invest €180 billion ($A290 billion) in its latest five year plan, with most of it dedicated to the growth of its battery electric vehicle business, and digitisation.

VW sold more than half a million full battery electric vehicles in 2022, making it one of the biggest EV sellers in the world.

But full battery electric cars still make up just seven per cent of its total sales. That puts it ahead of other legacy car makers like Toyota, but well behind the average in the world’s biggest markets, and it needs to catch up to the pace set by Tesla and some of the big Chinese owned brand names.

“FY22 was an important year for the Volkswagen Group, CEO Oliver Blume said. “We made headway on executing our strategy, despite extreme headwinds. BEVs accounted for a record 7 percent share of total deliveries a significant milestone that we will build upon this year as our popular model range continues to grow.”

In its last 5 year plan,  Volkswagen had allocated 56% of its budget to electrification and digitisation, but it has now increased this to 68 per cent as it seeks to ramp up its EV offerings.

Around €15 billion will be set aside for the construction of cell factories by Volkswagen’s battery start-up PowerCo, as well as expenditures for securing raw materials as part of the implementation of the battery strategy.

The company press release notes that “there will be ongoing investments in the last generation of combustion engines” but that investment is expected to peak in 2025 before it starts to decline.

“We must transform ourselves into a technology and mobility services group,” said Volkswagen’s chief financial and operating officer Arno Antlitz. “We need to focus on our platforms, such as our hardware for battery-powered electric vehicles, a unified software stack, batteries, mobility, autonomous driving.”

Volkswagen delivered 572,100 BEVs in 2022, a 26% increase compared to 2021.

The Group’s three best-selling BEVs in 2022 were:

Volkswagen ID.4/ID.5 (193,200 sold)
Volkswagen ID.3 (76,600 sold)
ŠKODA Enyaq iV (53,700 sold)

The company says that it will present several significant new models in 2023 including the updated ID.3, the new ID.7, the long wheel version of the ID.Buzz, the electric Kombi, and the Cupra Tavascan and Audi Q8 e-tron.

The investment announcement came just a day after Volkswagen announced the plan for its first battery cell plant in North America in Ontario Canada.