Volkswagen is investing in digitalisation

Volkswagen AG
2 min read
Nov. 14. 2020
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Wolfsburg - The Volkswagen Group is pressing ahead with its transformation into a digital mobility company. As decided in Planning Round 69, the Group will spend around EUR 73 billion on electrification, hybrid powertrains and digital technology over the next five years.

Investments in digitalisation will double to EUR 27 billion by mid-decade, reflecting the Group’s strong focus on building up software capabilities. Approximately EUR 35 billion will be spent on battery-electric vehicles. A further approximately EUR 11 billion has been earmarked for the development of hybrid vehicles of existing models.

“As part of Volkswagen Group’s investment planning, the Board of Management and Supervisory Board today set the cornerstones for securing the Group’s future success. The transformation of the Group and its brands and the strategic focus on the core areas of mobility will be consistently implemented. Considering the enormous challenges we face in the coming years, our financial basis is very solid,” said Hans Dieter Pötsch, Chairman of the Supervisory Board of the Volkswagen Group.

“Having set the course for a battery-electric future in the Volkswagen Group early on, we are now a global leader with our electric platforms and a broad range of electric vehicles,” said Herbert Diess, Chief Executive Officer of the Volkswagen Group. “In the coming years, it will be crucial to also reach a leading position in car software in order to meet people’s needs for individual, sustainable and fully connected mobility in the future. To that end, we have doubled our digitalisation spend.”

Bernd Osterloh, Chairman of the General Works Council, commented: “The investments demonstrate that our Group walks the talk when it comes to transformation, electric mobility and digitalisation. We will go fully on the offensive in the coming years. Yet, just as important as billion-euro budgets are a common understanding of the transformation and adequate planning reliability. This is where all of us – employees, managers, the Board of Management and also policy-makers – come in. As regards the latter, I am thinking in particular of Berlin and Brussels and hot topics such as charging infrastructure and high-speed Internet. Volkswagen is fully committed to climate-friendly, highly networked mobility. But for this, we and our customers need a reliable environment.”

The Planning Round is based on the expectation that the global economy will grow moderately over the next five years. Moderate growth with regional differences is also anticipated for the individual markets. The increase in productivity of 30 percent and savings in administration are to secure the transformation financially. In addition, the Group is systematically working on the optimisation of its product portfolio. Thus, model variants, engine-transmission combinations and features that are less in demand will be streamlined in order to reduce the complexity and increase the efficiency of the portfolio. The planning excludes the joint venture companies in China, since they are not part of the consolidated group and finance investments in plants and products from their own resources.

Volkswagen was the first automaker to commit to the Paris Agreement and aims to become climate neutral by 2050. Over the next ten years, the Group intends to launch approximately 70 all-electric models by 2030. Around 20 of these are already in production, with 50 more to follow. In addition, around 60 hybrids are planned by the end of the decade, slightly over half of which are already being manufactured.

In future, Volkswagen Commercial Vehicles will build the all-electric ID. BUZZ at its Hanover location, along with three fully electric D-SUV models for other Group brands. The Hanover site is thus accelerating the transformation to electric mobility that has already commenced.

At the Volkswagen’s brand plant in Emden, the transformation is also progressing rapidly: while the construction work for the switch to electric mobility is fully on track, the second electric model for the site has now been defined. In addition to the ID.4, the four-door all-electric Volkswagen Aero1 is scheduled to be manufactured there from 2023.

At the same time, the Passat currently built in Emden will be produced in Bratislava, Slovakia, starting in 2023 – together with the ŠKODA SUPERB family – which will leverage synergies within the vehicle family here, too. Moving production of the SUPERB from the Czech plant in Kvasiny to Bratislava will give ŠKODA the necessary capacity in the Czech Republic to carry out the brand’s growth plan.