The German car manufacturer Volkswagen plans to allocate 180 billion euros for investments over the next five years. Most of it will be used for electrification, as VW wants to reduce the cost of electric vehicles with its own battery production and raw material procurement.
Volkswagen today presented an investment plan for the next five years with a total value of 180 billion euros. More than two-thirds of the funds (120 billion euros) will be allocated to electrification and digitization.
The company plans to allocate up to 15 billion euros for the production of batteries and the purchase of raw materials. Volkswagen aims to offer an affordable electric vehicle on the market by 2025 with a current value of around 25,000 euros.
CFO of Volkswagen Arno Antlitz he hopes the company will have contracts for raw materials and expanded battery production by then. This would reduce the production costs of electric vehicles, with the cost of batteries accounting for as much as 40 percent.
Antlitz however, he warned that, given the market turmoil after the bank’s collapse, Silicon Valley postponed some investments in batteries in case the market did not grow as expected.
Director of Volkswagen’s Automotive Parts Division Thomas Schmall said on Monday that they plan to cover all needs until 2028 with the three battery factories that are already being built in Germany, Spain and Sweden, so there is no rush to choose new locations.
At the same time, he also revealed the intention of the first Volkswagen battery factory in North America. It is planned to be built in Canada, and production should begin in 2027.
Electricity and internal combustion as a “double burden”
At the same time, Volkswagen, the largest car manufacturer in Europe, wants to maintain its position in the market for electric vehicles and in the market for vehicles with internal combustion engines. “We expect to reach 20% from 2025 electromobility in new sale. On the other hand, we need to maintain the competitiveness of internal combustion engines, which is a double burden,” he also said Antlitz.
The European Union is otherwise in its ambitious environmental targets intended to ban the sale of new vehicles with internal combustion engines after 2035, but opposition was voiced by automotive superpower Germany – which advocated internal combustion engines powered by synthetic fuels produced from renewable energy – which ultimately the approval of the legislation was postponed.