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Volkswagen Group to spend >$40B over next 5 years to develop electric mobility, autonomous driving, new mobility services and digitalization

The Volkswagen Group will spend more than €34 billion (US$40 billion) by the end of 2022 on the development of electric mobility, autonomous driving, new mobility services and digitalization.

Most of this investment will go into the electrification and hybridization of all Group models. This marks another move to advance the Roadmap E electrification offensive which was announced in September; the goal is to electrify the entire model portfolio by 2030. (Earlier post.)

We are reinventing the car. We are making targeted investments in digitalization, autonomous driving, electric mobility and new mobility services by providing the necessary funds from our own resources. We are, however, doing so without sidelining existing technologies and vehicle projects, since this is how we will earn our money for the foreseeable future.

—Matthias Müller, CEO of Volkswagen AG

As part of the planning round for 2018 to 2022, the Group has also optimized its plant and workforce assignment. The main highlights:

  • For the launch of Europe’s first series production of electric vehicles on the MEB platform (the I.D. series), the Zwickau site will be remodeled into a pure-play e-mobility plant. This will lay a key foundation for the electrification and hybridization of the Group’s product portfolio. Other location decisions at the individual brands will be made as the Roadmap E is rolled out further.

  • From the end of 2018, the entire Passat family will be concentrated at the Emden site.

  • The VW Golf family will be bundled in Wolfsburg from the next vehicle generation onward.

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Despite the ambitious growth targets, Group management says it is committed to reduce both the capital expenditure ratio and the research and development ratio in the Automotive Division. According to the new planning round, each of the two ratios will decline to a competitive level of 6.0% from 2020 onward. In 2016, the corresponding capex ratio stood at 6.9%.

The Volkswagen Group expects Brazil, China, Russia and North America to be the main growth drivers in the coming years. The planning round does not include the investments of the joint venture companies in China. These companies finance the investments in the Chinese plants and products from their own resources.

Successful implementation of Roadmap E would result in around one in four new vehicles produced by the Group being a battery-only electric vehicle. Depending on how the market develops, this could mean up to three million e-cars a year.

Electrifying the entire model portfolio by 2030 would mean that by then there will be at least one electric variant of each of the Group’s around 300 models. To this end, the Company has invited tenders for one of the largest purchasing volumes ever, with plans to spend over €50 billion (US$60 billion) on battery cells. (Earlier post.)

Comments

HarveyD

Seems to be a serious attempt to progressively switch from ICEVs (Diesel and Gasoline) to BEVs.

Tesla will soon have competition from multiple sources.

Huge demands will contribute to batteries faster evolution?

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