The world’s largest automaker Volkswagenincreased amidst the Corona crisis and the economic uncertainty set the pace when switching to the Electromobility. In the next five years (2021-2025), Volkswagen plans to invest 73 billion euros in climate-friendly drives and digitalization and thus almost every second euro of its entire investment budget in this period. As before, this will be kept at 150 billion euros. The board of directors decided on Friday.
In the previous plan, which ran from 2020 to 2024, the group had planned investments of almost 60 billion euros for these future topics. In the new planning phase alone, 35 billion euros will flow into electromobility, two billion more than previously planned. Hybrid drives go to eleven billion euros. Most of the money will be increased for digitization, especially the networking of vehicles and a dedicated operating system for the electronic control of the cars. Volkswagen is doubling its spending here to around 27 billion euros. “In the next few years it will be important to also take a leading position in vehicle software,” said CEO Herbert Diess (62).
Every year, Volkswagen renews its five-year plan. The total remains almost unchanged compared to the previous year. The chinese Joint ventures are not yet included in the expense calculations.
There is no income from traditional business for the start-up
“We have to adjust our planning,” CEO Diess had warned of the current round with a view to the sales crisis that was developing tightened again in October. Many auto markets would not recover until 2023, he said last week at an online conference from “Bloomberg”. The money not taken is missing in the investment budget. “These are resources that we didn’t get.” Volkswagen must therefore save more. At the same time, however, Diess called for the turn to future technology to be tightened.
Volkswagen intends to continue to generate the money for the investments both through the inflow of funds from ongoing business, initially primarily through the sale of combustion engines, and through savings. In addition, processes in the group are being streamlined and less popular vehicle variants are being removed from the range. Some locations that focus on traditional business therefore have to be prepared for cuts.
Supervisory board chairman Hans Dieter Pötsch (69) said the group is well positioned to handle this huge package: “The financial starting point is rock solid against the background of the major challenges in the next few years,” he explained.
Volkswagen is planning so much money because the EU’s “Green Deal” is again expecting stricter climate requirements and thus stricter CO2 limits for the automotive industry. For Volkswagen, this means that half of all newly registered cars will have to be electrically powered in ten years. So far, an electrical share of 20 to 25 percent had been forecast in Wolfsburg for 2025.
Three billion euros for the main plant in Wolfsburg – Osterloh switches to “attack”
Since the diesel scandal five years ago, Lower Saxony has been relying fully on electromobility and has with them the ID.3 recently launched their first all-electric car, the ID.4 should follow later this year. In the next few years, Volkswagen wants to become the largest provider in this field and to join the US electric car pioneer Tesla pass by.
The figures showed how serious the group is about change, said works council chief Bernd Osterloh (64). “We’ll be on the attack for the next few years.”
Osterloh once again called on politicians to give more support to the car industry in upheaval. “A common understanding of change and sufficient planning security are at least as important as billions in budgets,” said Osterloh on Friday in Wolfsburg following the investment planning round. This requires everyone, the workforce, managers, the board of directors and politicians. “I am thinking of the latter particularly with a view to Berlin and Brussels and long-running topics such as charging infrastructure and fast internet,” said Osterloh.
According to the works council, investments in tangible assets of more than three billion euros are flowing into the main plant in Wolfsburg alone. Among other things, a successor to the small SUV Tiguan and a new large SUV similar to the one in China manufactured model Tayron. Volkswagen is also bringing all the variants of the core Golf model together at corporate headquarters.
Light commercial vehicles account for a total of just under 4.5 billion euros. This is not only about the headquarters in Hanover, but also about the Polish locations or the expansion of the cooperation with ford. A lot of money goes into preparing the ID.Buzz electric bus. Around 680 million euros have been reserved at the Hanover location for the production of a new, cross-brand, upper-class electric car (D-SUV) in three different variants.
Emden loses the Passat – and gets the electronic successor Aero
The Emden plant, which will soon have to hand over the Passat to Bratislava, Slovakia, will receive around one billion euros. From the beginning of 2022 – in addition to Zwickau – the small electric SUV ID.4 and from 2023 the Aero as the electronic successor to the Passat are planned. For the Saxon locations in Zwickau, Dresden and Chemnitz, 1.2 billion euros are earmarked, mainly to expand capacities for electric models and the standardized electrical construction kit (MEB).
The internal supply plants also get a lot of money for new investments. The transmission plant in Kassel was allocated 1.3 billion euros, which is also primarily about components for electromobility and hybrid drives. In Braunschweig, where battery systems, axles and steering systems are produced, more than 870 million euros are to be spent.
The Salzgitter engine plant, on the site of which its own battery cell factory is currently being built, will receive around 800 million euros – according to the company, around one billion euros will be invested in battery technologies.