During the next five years, the Volkswagen Group has committed to spending $131 billion on electrification and digitalization.
At least one new North American EV manufacturing plant will be included in the investment, which was revealed at the company’s annual general meeting on March 14, in Wolfsburg, Germany.
The ID.7 and ID.Buzz, which will be sold under the VW brand, will make their North American debut in 2024. It has also revived the Scout brand, with the first production Scout EVs scheduled for 2026.
The investment amount is based on the VW Group’s projected profit margin of 8.1% and its 2022 profit of $24.1 billion, which was up 13% from its 2021 performance. Meanwhile, About $16.1 billion of the committed EV investment has been set aside for battery development, manufacturing, and raw material sourcing.
Until 2025, when it expects to gradually reduce its investments and redirect them to EV development and manufacturing, it will continue to grow spending on combustion engines, delivering a total five-year development investment of $193.15 billion.
According to Oliver Blume, CEO of VW Group, “financial year 23 will be a pivotal year for executing strategic goals and increasing growth across the Company. Adding, “We have established clear, ambitious goals, and made the required measures to streamline procedures in FY22.”
The automaker has a target penetration of 10% EVs in 2023, to launch the improved ID.3, ID.7, ID.Buzz long wheelbase, Cupra Tavascan, and Audi Q8 e-tron. Although battery-powered vehicles made up 16% of the VW Group’s forward order book, they only accounted for 7% of the Volkswagen Group’s sales in 2022 due to EVs’ 26% growth. Only Lamborghini has not confirmed a plan for EV production among the VW brands (Audi, Bentley, Seat, Skoda, Porsche, Lamborghini, and Volkswagen), though an EV is speculated to be arriving in the second part of the decade.
