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Volkswagen<\/strong> is speeding up in electric. The German automaker said Tuesday that it plans to invest 180 billion euros ($193 billion)<\/strong> over five years<\/strong> in battery production and raw material supply. The investment is part of a strategy adopted by many automakers to reduce the costs of electric vehicles<\/strong> and protect their market share<\/p>\n <\/p>\n The company announced Tuesday that more than two-thirds of its five-year capital budget will be allocated to electrification<\/strong> and digitalization<\/strong>, with up to $15 billion spent on batteries and raw materials.<\/strong> However, after the collapse of Silicon Valley Bank, the markets are somewhat shaken up and CFO Arno Antlitz<\/strong> informed analysts that the company may delay some battery investments.<\/p>\n <\/p>\n At the end of the five years, Antlitz hopes the company would then have secured enough raw material supply agreements and increased battery production to reduce electric vehicle expenses, 40 percent<\/strong> of which come from battery costs.<\/p>\n <\/p>\n “We plan to reach 20 percent electromobility in new sales starting in 2025, and we are already investing two-thirds of our budget in this area”<\/em>, he said.<\/p>\n <\/p>\n <\/p>\n Volkswagen, as Europe’s largest automaker<\/strong>, is working to close the gap on electric vehicle pioneer Tesla<\/strong> by increasing its share of the growing market for battery-powered cars. The German brand aims to bring affordable electric vehicles – costing about 25,000 euros ($26,795)<\/strong> – to market by 2025. This vehicle would be produced on a second-generation version of its all-electric MEB platform<\/strong>. To achieve these goals, the automaker also announced the construction of its first North American plant in Canada, which is expected to go into production in 2027<\/strong>.<\/p>\n <\/p>\n Volkswagen also intends to focus its investments on increasing its sales in China<\/strong>, which is traditionally its most important market. However, the German group is finding it difficult to establish itself in this country due to competition from local manufacturers.<\/strong> During his visit to China last month, Olivier Blume<\/strong>, CEO of the group since September 2022, said he was impressed by the development of the electric vehicle market. The group makes about 40%<\/strong> of its sales in China, mainly with traditional engines. In China, for example, it achieved a 16 percent<\/strong> market share in the automotive sector last year.<\/p>\n <\/p>\n “We are very strong in internal combustion engines, but we are still behind in electric vehicles”<\/em>, Blume said.<\/p>\n <\/p>\n <\/p>\n Volkswagen shares were down 2.6%<\/strong> around 11 a.m. Tuesday, with Jefferies<\/strong> analysts calling the detailed fourth-quarter results “weak.” In 2022, Volkswagen met analysts’ expectations on revenue, but missed the consensus estimate for earnings before interest and taxes by 3%<\/strong>. Oliver Blume has therefore drawn up a 10-point plan<\/strong> to achieve the investment targets.<\/p>\n <\/p>\n The automaker also said it was finalizing high-performance software<\/strong> for its premium and luxury brands. The latter could in the medium term be applied to the entire company, with the aim of improving the operations of its Cariad<\/strong> software unit. Created by former CEO Herbert Diess<\/strong>, Cariad has not met its targets, resulting in an operating loss of \u20ac2.1 billion in 2022<\/strong> on sales of \u20ac800 million<\/strong>, according to the carmaker’s annual report.<\/p>\n <\/p>\n This month, the automaker released an optimistic outlook for the coming year, which sent shares soaring. Volkswagen expects revenues to rise by 10 percent to 15 percent thanks to a 14 percent increase in deliveries.<\/strong><\/p>\n <\/p>\n Read also >Road to 20 : Porsche to further optimize profitability<\/a><\/p>\nCatching up with Tesla and the Chinese<\/h2>\n
Production on the rise<\/h2>\n