Volkswagen investing $50 billion in electrification plan

December 2, 2018

Volkswagen investing $50 billion in electrification plan

Volkswagen’s ID. model will be launched as a compact-class electric vehicle in 2020 (Courtesy Volkswagen AG)

 

Volkswagen Group (VW), headquartered in Wolfsburg, Germany, has stated that it will invest almost €44 billion ($50 billion) on developing and mass producing electric cars, autonomous driving and new mobility services by 2023. The automotive company stated that, through this plan, it could become the most profitable manufacturer of electric cars.

Dr Herbert Diess, Chairman of the Board of Management of Volkswagen, told Reuters during a news conference in Wolfsburg that he also hopes to have an outline agreement on cooperation with Ford by the end of 2018, with the initial focus being on commercial vehicles.

During the news conference, Diess reportedly stated that mass producing electric cars will help Volkswagen to reduce the cost of these vehicles to a cost in line with current diesel vehicles.

VW further stated that it plans to increase productivity in its factories by 30% by 2025, by building a number of vehicles from different brands on one production line. “Volkswagen must become more efficient, more productive and more profitable in order to finance the high expenditure in the future and stay competitive,” Diess was reported to have said.

 

Volkswagen investing $50 billion in electrification plan

Volkswagen’s management team and members of the board spoke to journalists at a news conference in Wolfsburg (Left to right: Stephan Weil, Member of the Supervisory Board, Dr Herbert Diess, Chairman of the Board of Management, Hans Dieter Pötsch, Chairman of the Supervisory Board, Bernd Osterloh, Member of the Supervisory Board of Volkswagen) (Courtesy Volkswagen AG)

 

However, in order for the planned investment in mass electric vehicle production to go ahead, the relevant labour unions must sign off on the plan. Due to the fact that roughly 436,000 industrial jobs in Germany are directly related to the building of internal combustion engine vehicles, and that the labour unions in question control half of the seats on VW’s supervisory board, it is speculated that this may pose a threat to the company’s plans.

At the end of November 2018, Volkswagen’s management outlined its plans to convert plants in Zwickau, Emden and Hannover to produce electric vehicles and provide job guarantees to workers until 2028. Zwickau currently produces the VW Golf and VW Estate, and is expected to produce the first ID electric vehicle in 2019, amidst a ramp up of the facility to a production capacity of 330,000 electric vehicles.

www.volkswagenag.com

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