Volkswagen has unveiled a strategy to hasten its shift towards electric vehicles and strengthen its presence in China and North America
Volkswagen has announced its plans to invest $193 billion towards the development of electric vehicles and software. The investment will primarily focus on battery cell production, software development and securing the supply chain for raw materials. The aim is to ensure that by 2025, one in every five vehicles sold by Volkswagen is electric.
Oliver Blume, Volkswagen’s CEO, revealed a 10-point plan to steer the company towards electric vehicles. The strategy involves expanding the automaker's presence in North America and becoming more competitive in China. Mr. Blume also emphasized the importance of having a clear direction and stated that 2023 will be a decisive year for the company.
This significant investment comes as Volkswagen continues to recover from its diesel emissions scandal in 2015. The move towards electric vehicles is part of Volkswagen's efforts to improve its environmental reputation and align with the shift towards sustainable mobility.
Volkswagen CEO, Oliver Blume, intends to use the proceeds from Porsche's 2022 initial public offering to support Volkswagen's electrification strategy. Volkswagen aims to ensure that one in five of the vehicles it sells is electric by 2025. The company plans to invest €180 billion ($193 billion) in battery cell production, software development, and the securing of critical raw materials for batteries. Volkswagen will continue to produce combustion-engine cars, which generate profits to pay for the transition to electric vehicles, while also shifting its focus towards technology and mobility services.
Volkswagen's challenges include managing the demand for combustion-engine vehicles while transitioning to electric vehicles and dealing with high inflation caused by Russia's invasion of Ukraine. The company plans to transform itself into a technology and mobility services group, focusing on platforms such as batteries, unified software stacks, mobility, and autonomous driving. Volkswagen will continue to invest in China, where it is the leading producer of combustion-engine vehicles, and expand its "in China for China" strategy. In North America, Volkswagen is behind other automakers and is focusing on producing electric vehicles, including the ID.4 sport utility vehicle, and establishing new battery plants. In Europe, Volkswagen's main focus is its first battery cell plant in Salzgitter, Germany.