Volkswagen plans to invest €180 billion over the next five years in areas including battery production and its North American operations, it said today, with spending on combustion engines to decline from 2025.
As it works toward a target of 50% electric vehicle (EV) sales globally by 2030, over two-thirds of the five-year investment budget is allocated towards electrification and digitalisation.
This is up from 56% in a five-year plan it had released a year earlier.
In the latest plan, €15 billion is ringfenced for battery plants and raw materials and €2 billion will be put toward a plant in North Carolina for its Scout brand.
Investment in combustion engine technology will peak in 2025 and decline from then on, said the automaker, which has more ambitious electrification targets than some rivals.
The investment decisions are targeted towards fulfilling a 10-point plan developed by chief executive Oliver Blume after he took the helm of the automaker in September.
Volkswagen is also expected to share the results of a 'virtual equity story' exercise instigated by Blume later today.
That had all of the company's brands, which span from Audi to Bentley, prepare for a listing as a training exercise to become more attractive to capital markets.
The most likely stock market candidate is battery unit PowerCo. Reuters in November reported talks were with investors to buy into the division ahead of a possible partial listing.
The carmaker this month issued an optimistic outlook for the year ahead that sent shares soaring, forecasting a 10% to 15% rise in revenue on 14% higher deliveries despite supply chain challenges.
Volkswagen's earnings margin in 2022 was at the upper end of its 8.1% forecast, with sales and earnings outpacing 2021 levels despite supply chain turmoil dragging its net cash flow far below target.
Volkswagen yesterday announced its first battery cell plant outside of Europe would be in Canada, with production to start from 2027.
It was in no rush to decide on the location of its next European plant until it knew what incentives Europe would offer, board member Thomas Schmall said.