Volkswagen Plans $193 Billion Commitment to Electric Vehicles
The German automaker is planning a significant expansion into the North American market.
Volkswagen recently announced plans to invest $193 billion to make every fifth vehicle it sells electric by 2025. More than two-thirds of the money will go toward software, battery factories, and other investments.
At a Tuesday media event, the New York Times reports that Arno Antlitz, CFO of the Volkswagen Group, said the company must transform "into a technology and mobility services group."
"We need to focus on our platforms," Antlitz said, "such as our hardware for battery-powered electric vehicles, a unified software stack, batteries, mobility, autonomous driving." He also said that his company's strong financials would help it to "continue investing in electrification and digitalization" despite the current "challenging economic environment."
CNBC reported a 68% spike in China propelled Volkswagen's move toward EV expansion, aided by the company's completion of a landmark plant in Tennessee.
Delivery numbers for Volkswagen did decline overall by 7% in 2022, then current CEO Oliver Blume took over from Herbert Diess—who aggressively pushed the company to embrace electric cars—in September last year. Blume said at the Tuesday presser that 2023 would be a decisive year for Volkswagen.
Thanks to a rise in energy prices and COVID-19-disrupted supply chains beginning to self-correct, Volkswagen did report a net profit of $16.7 billion in 2022—a 2.6 percent increase from the previous year.
Volkswagen indicated Tuesday that it will continue investing in China, forging partnerships with local companies there. In addition, the automaker plans to become a more significant North American player. Such moves could help it catch up to leading US automakers like General Motors, Ford, Toyota, and Hyundai.