German car giant Volkswagen said on November 16th that it will invest 44 billion euros by 2023 in the smarter and greener cars of the future, while accelerating efforts to shake off the diesel emission scandal.
Over the next five years, Volkswagen said it plans to spend nearly € 44bn (€ 50bn) for electric cars, cars and vehicles connected, as well as for mobility services such as car sharing.
The figure represents about one-third of the group's planned spending by 2023, and most of it will continue to develop electronic cars, VW said after a meeting of a future surveillance committee.
Volkswagen's "electric offensive" highlights how serious the car is to close the gap with Asian rivals and US technical giant Tesla, who had a start in the e-car race.
"We want Volkswagen to become world number one in e-mobility," said Herbert Diess, reporters.
"It's time to make additional decisions in technology and products to achieve this goal." The group, whose brands range from luxury Porsche and Audi to the conscious budget Skoda and Seat, has set its ambitious target of offering over 50 electric models by 2025 from six today.
He has particular hopes, especially for Volkswagen ID compact, zero emissions, which will have a range of 550 km of batteries and will cost almost the same thing as a Volkswagen Golf – in a direct challenge to Tesla's cars, model market 3.
As part of the new strategy, Volkswagen plans to reshuffle some production sites in an attempt to increase efficiency and achieve savings by grouping the production of different models across brands.
"We are making the right plants for the future," said Oliver Blume, a member of Volkswagen's board of directors.
Two existing German factories will be transformed into assembly lines for electric vehicles from 2022.
The Emden plant will specialize in the construction of electric cars and sedans for some of the group's brands, while the Hanover plant will make ID Buzz, the clean energy version of the VW iconic van.
In a sign of worry about job losses, Diess admitted that electric motors, which require fewer parts than combustion engines, are "much less complex" to build.
But Volkswagen has promised to secure jobs in both locations by 2028, focusing instead on phasing out positions without replacing retirees.
VW also announced the intention to open a new factory in a location still determined in Eastern Europe.
Diess also confirmed that Volkswagen "is currently in talks", in conjunction with US competitor Ford in the construction of light commercial vehicles, which would involve the division of factories.
But he was aware of the speculation that this cooperation could be extended to the production of electric and autonomous cars.
Diess said partnerships have become necessary to achieve cost savings at a time when the industry is undergoing a costly transformation.
Looking further, Volkswagen said it is still "exploring the potential" to produce its own batteries for electric cars, as Europe's concern over Asian domination in battery cell production is growing.
The volume of Volkswagen tires to electronic cars was partly driven by efforts to shake up the scandal in the ongoing "diesel dump."
The group was forced to admit in 2015 that it installed scam software in 11 million diesel vehicles designed to cope with polluting tests.
Suspicions of deception later spread to other carmakers, seriously damaging the reputation of the industry.
The Saga also fueled a reaction against diesel engines with a string of German cities now facing driving bans for the oldest and most polluting diesel cars.
Faced with increasingly furious drivers, the German government has been put under pressure to avoid bans, but its efforts to get car manufacturers to commit to clean engines have been limited.
The impact of "diesel fuel" has so far cost Volkswagen more than 28 billion euros in fines, redemptions and compensation, and the company remains stuck in legal issues around the world.
However, customers remained loyal, helping Volkswagen record sales last year.