Volkswagen boosts investment in EV tech

Will spend $86b over five years on electric and autonomous car technology

BERLIN:

Volkswagen has raised its planned investment in digital and electric vehicle technologies to €73 billion ($86 billion) over the next five years as it seeks to hold on to its crown as the world’s largest carmaker in a new green era. Under a plan presented on Friday, Volkswagen said it would allocate nearly half its investment budget of €150 billion for e-mobility, hybrid cars, a seamless, softwarebased vehicle operating system and self-driving technologies. In last year’s plan, the German car and truck maker, which owns brands including VW, Audi, Porsche, Seat and Skoda, had earmarked €60 billion for electric and self-driving vehicles out of the €150 billion budget. A global clampdown on emissions, partly triggered by Volkswagen’s diesel pollution scandal in 2015, has forced carmakers to accelerate the development of low-emission technology, even for their low-margin mainstream models. “ The transformation of the company and its brands as well as the strategic focus on the core mobility areas will be consistently implemented,” Volkswagen’s Supervisory Board Chairman Hans Dieter Poetsch said. Jefferies analyst Philippe Houchois said while the overall investment budget had remained unchanged, Volkswagen’s priorities had seen a “meaningful re-allocation to software and digitisation and a continued priority on Germany”. Volkswagen has said the European Union’s more stringent emissions targets will force it to boost the proportion of hybrid and electric vehicles in its European car sales to 60% by 2030, up from a previous target of 40%. Pressure to retool factories to build electric cars has also increased after California, which accounts for 11% of US car sales, said in September that it plans to ban the sale of new gasoline-powered cars and trucks from 2035. The emissions clampdown has already led Volkswagen to review the future of its Lamborghini, Bugatti and Ducati brands as it seeks to increase economies of scale for the shift to mass producing electric cars. I n i t s n e w p l a n , Volkswagen is doubling its spending on digitalisation to €27 billion to develop its new vehicle operating system and self-driving technologies. About €35 billion of the spending budget money will be invested in e-mobility and €11 billion has been earmarked for the development of new hybrid cars, it said.