Volkswagen plans to invest €180bn between 2023 and 2027 in battery production and securing raw materials as it aims to bring an affordable electric vehicle to market by 2025.
The carmaker said on Tuesday that the investment would be focused on its most attractive profit pools, including the group’s battery strategy, growing its presence in North America, and increasing competitiveness in digitalisation and products in China.
More than two-thirds of the investment will be in digitalisation and electrification, including €15bn for the construction of cell factories by battery startup PowerCo and to secure raw materials for its battery strategy.
As Europe’s top carmaker, Volkswagen is looking to ensure it can remain competitive with rival Tesla Inc (NASDAQ:TSLA) as the US Inflation Reduction Act draws green investment away from Europe.
The company is still aiming to bring an affordable electric vehicle, costing about €25,000, to market by 2025, Volkswagen chief executive Arno Antlitz said during an analyst call, per media reports.
Antlitz said he hoped by this time that the company would have entered into enough raw material sourcing deals and expanded its battery production to bring down EV costs, 40% of which stem from the battery.
Volkswagen on Tuesday also reported its full-year 2022 results where it exceeded analysts’ expectations on revenue but missed on earnings before interest and taxes by 3%.
Shares of the carmaker traded 2.6% lower at €127 on Tuesday afternoon.
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