Volkswagen Plans to Invest 68% in Electrification and Digital Networking
Volkswagen plans to reshape its development budget allocation for the next five years. The company intends to invest around 180 billion euros by 2027, with a significant part going to digitization and battery cells research. The investment in future technologies accounts for around 68% of the total funds, an increase from the previously estimated 56%.
The revised allocation is necessary because Volkswagen predicts that by 2025, one out of five cars sold by the brand worldwide would be electric. The trend towards electric vehicles is rising sharply, and Volkswagen is gearing up to meet the demand.
Volkswagen is building a battery gigafactory in Canada and investing up to 15 billion euros to expand its production of battery cells and secure raw materials. The goal is to generate an annual sale of over 20 billion euros through its own battery brand, PowerCo, by 2030. Canada is the first country outside Europe where PowerCo is building a gigafactory that will produce sustainable unit cells. Start of production is planned for 2027.
Volkswagen Aims to Increase Profit and Digitize Cars in China
In addition to expanding the production of battery cells, Volkswagen aims to intensify efforts to digitize cars in China and play a more significant role in the North American market. The company has faced challenges meeting the demands of young Chinese customers for connectivity in cars in recent years.
Despite the challenges, Volkswagen had a profitable year in 2022, with a 22.6% increase in overall profit, reaching almost 2.65 billion euros. The sale in the Volkswagen division also rose by 8.7%, recording 73.8 billion euros, attributed to a tight supply of new cars that caused discounts to fall and prices to rise.
In conclusion, Volkswagen is taking steps to meet the increasing demand for electric vehicles and digitization in the automotive industry. The revision in investment funds allocation is a significant move towards achieving the brand’s goals.
