Volkswagen plans to invest 180 billion euros over five years in areas such as battery production and raw material supply in a bid to reduce the cost of electric vehicles and protect its market share, the company said on Tuesday.
More than two-thirds of the company’s five-year investment budget announced on Tuesday is earmarked for electrification and digitalisation, including up to 15 billion euros for batteries and raw materials.
With markets in turmoil due to the collapse of Silicon Valley Bank, Chief Financial Officer Arno Antlitz told analysts, however, that the company could delay some battery investments if the market doesn’t grow as expected.
The automaker still intends to bring an affordable electric vehicle to market by 2025, costing around 25,000 euros in current prices, built on a second-generation version of its all-electric MEB platform.
Antlitz said he believes the company has already closed enough raw material supply deals and expanded battery production to reduce costs, 40 percent of which comes from the battery sector.
“We expect to achieve 20% electromobility in new sales from 2025 and are already investing two-thirds in this area,” Antlitz said. “On the other hand, we have to keep combustion engines competitive… that’s a double burden.”
The automaker said it was finalizing performance software for its premium and luxury brands, which could be rolled out companywide in the medium term, in an effort to improve operations at its Cariad software unit.
The unit created by former chief executive Herbert Diess has gone over budget and beyond its targets, suffering an operating loss of €2.1 billion in 2022 and revenue of €800 million, according to the house’s annual report. automaker released Tuesday.
Volkswagen shares fell 2.6% on Tuesday, with Jefferies analysts describing detailed fourth-quarter results as “weak.”
Volkswagen met analyst expectations in 2022 for revenue, but fell short of the EBITDA consensus estimate of 3%.
The automaker this month released an optimistic outlook for the coming year that sent shares higher, expecting revenue to rise 10% to 15% with deliveries up 14%.
Source: Terra
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