Volkswagen announced Thursday that it would spend $11.2 billion to create more than 30 electric auto models by 2025, develop autonomous vehicles and move into the ride-hailing business.
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Volkswagen also named its commercial vehicle divisions; MAN, Scania, and Volkswagen Commercial Vehicles in the plan, stating that it would strive to make the multi-brand Volkswagen Truck and Bus division the most profitable in its sector, putting to rest claims that those brands might be sold off.
Matthias Mueller, chief executive of the German vehicle maker, told reporters on Thursday VW will launch 30 all-electric models by 2025, by which time it aims to sell between two and three million EVs accounting for around 20 to 25 per cent of the firm’s yearly sales of 10 million cars.
Finally, in the area of autonomous cars, VW says it will fund its own research for autonomous and artificial intelligence technology with the view to licensing a competitive self-driving system to other firms by the end of the decade. More details about the electric models will be known at a later date.
Core inflation, which excludes volatile food and energy, was also up 0.2 percent in May.
Described as the “biggest change process” in Volkswagen’s history, a new long-term future plan, dubbed TOGETHER – Strategy 2025, will see the company adopt a new set of operation goals and procedures to ensure the future success of the organisation.
Volkswagen costs are higher in part because it has powerful employee representatives under German law who make it harder to shed workers, outsource work or move production.
“We believe in the future of this technology, its rapid spread and its revolutionary potential”, Mueller said.
“There are worthy elements among the plans but it’s probably also a marketing exercise by VW to tell the public that they have gotten the message”, noted Commerzbank analyst Sascha Gommel.
Mr. Müller said he was outlining the “key building blocks in the new group strategy” to increase profitability and innovation.
Mueller said the company would need more electric vehicles to meet increasingly tight government limits on emissions of carbon dioxide, the greenhouse gas blamed by scientists for global warming, and other pollutants. However, Volkswagen will continue to keep its focus on developing and selling internal combustion engines.
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While Volkswagen’s return on investment has traditionally lagged as a brand at around two per cent, its group profits last year only rose to six per cent, with Mueller insisting that will rise to between seven and eight per cent this year. The deadline also applies to any agreements Volkswagen reaches with the U.S. Justice Department and the Federal Trade Commission.
