Volkswagen says to invest 44 bn euros in e-cars by 2023

Volkswagen yesterday said it would invest 44 billion euros ($50 billion) over the next five years in the smarter, greener cars of the future as the German auto giant ramps up efforts to catch up with foreign rivals. “Over the coming five years to the end of 2023, the company will be spending almost 44 billion euros alone on the future issues of e-mobility, autonomous driving, new mobility services and digitalisation,” VW said in a statement.

The figure represents roughly a third of the group’s planned expenditure over the period, underscoring how serious VW is about closing the gap with Asian competitors and the likes of US tech giant Tesla. As part of the new strategy, VW will convert two existing German plants into assembly lines for all-electric vehicles from 2022. The plan in Emden will focus on building small electric cars and sedans for several of the group’s 12 brands, while the Hanover plant will make the I.D. Buzz, the zero-emission version of VW’s iconic camper van.

VW has promised to guarantee jobs at both sites until 2028. “We are making our plants fit for the future,” VW board member Oliver Blume said in a statement after a meeting of the supervisory board. As part of those efforts, the group intends to increase productivity and bundle production of different models to achieve economies of scale across brands.

“German plants are particularly well suited to making the transformation to the production of electric vehicles, given the high manufacturing expertise and qualification level of our employees,” said Blume. VW said it also plans to open a new factory at a yet to be determined location in eastern Europe.