Volkswagen to boost green cars production by investing $193 billion till 2028
Oliver Blume، Volkswagen's CEO، announced that the German company، the top carmaker in Europe plans to invest up to € 180 billion ($193 billion) over the next five years until 2028 in manufacturing sectors including € 15 bln euros in green cars and batteries production and raw materials، and its North American operations، in addition to allocate more than 66 % of its 5-yr budget for electrification، digitalisation، altough it will reduce its spending by 2025.
Oliver Blume، Volkswagen's CEO، stated that the investments come as the German company، Europe's biggest carmaker، tries to close a gap with green cars (electric vehicle EV) pioneer Tesla by expanding its slice of the growing market for battery-powered cars.
The Financial post said that Oliver Blume، Volkswagen's CEO، is boosting its rolling five-year spending plan by 13% with more than two-thirds going to software and green cars and electric vehicles as the German company is turning around sliding market share in China to be a major challenge.
The target of green cars 50% of its sales globally
Oliver Blume، Volkswagen's CEO، tries to achieve a target of green cars (electric vehicle EV) to be accounted for 50% of its sales globally by the end of this decade، over two-thirds of the five-year investment budget is allocated towards electrification and digitalisation، up from 56% in a five-year plan it had released a year earlier.
Oliver Blume، Volkswagen's CEO، explained that the difference betwwen the new investment and the previous plan is primarily to allocate more investment in its battery business، raw materials، and a $2 billion plant for the Scout brand.
Oliver Blume، Volkswagen's CEO، expects to reach 20% green cars or electromobility in new sales from 2025 and has already raised the investing by about two-thirds in that area but the German company needs to keep combustion engines competitive and that is a double burden.
High-performance software for premium and luxury brands green cars
Oliver Blume، Volkswagen's CEO، assured that the carmaker is finalising high-performance software for its premium and luxury brands green cars which could in the medium-term be applied across the company، in an attempt to improve operations at its software unit Cariad.
This unit، set up under former CEO Herbert Diess، has gone over budget and fallen behind on its goals، suffering an operating loss of € 2.1 billion in 2022 on revenue of € 800 million euros، according to the carmaker's annual report released on Tuesday.
Oliver Blume، Volkswagen's CEO، declared that the company met analysts' expectations of last year on revenues but missed the consensus estimate for earnings before interest and taxes by 3%، with logistics issues weighing on fourth-quarter results.
Forecasting a 10% to 15% rise in revenue
The German carmaker issued this month an optimistic outlook for the year ahead that sent shares soaring، forecasting a 10% to 15% rise in revenue on 14% higher deliveries despite supply chain challenges، Oliver Blume، Volkswagen's CEO، added.
Oliver Blume، Volkswagen's CEO، chose Canada to build its first battery cell plant outside Europe، granting its green cars access to both Canadian and U.S. subsidies as it works to localise electric vehicle production chain in the region.
Oliver Blume، Volkswagen's CEO، confirmed in December that the German company was looking for sites for a Canadian plant، six months after signing a memorandum of understanding with the country to secure access to key raw materials for green cars and batteries.