© Reuters. FILE PHOTO: The logo of carmaker Volkswagen Commercial Vehicles is pictured at the IAA Transportation fair, which opened its doors to the public on September 20, 2022, in Hanover, Germany, September 19, 2022. REUTERS/Fabian Bimmer
BERLIN (Reuters) – Volkswagen (ETR:) will invest 180 billion euros ($192.76 billion) in the next five years into areas including battery cell production, digitalisation in China and expanding its presence in North America, the carmaker said on Tuesday.
Over two-thirds of the five-year investment budget is allocated towards electrification and digitalisation, up from 56% in the previous five-year plan, with 15 billion euros of that ringfenced for battery plants and raw materials.
Investment in combustion engine technology will peak in 2025 and decline from then on, the carmaker said, as it works towards its target of 50% all-electric sales globally by 2030.
The carmaker earlier this month sent shares soaring with an optimistic outlook for the year ahead despite ongoing supply chain challenges, forecasting a 10-15% rise in revenue on 14% higher deliveries.
Its earnings margin was at the upper end of its forecast for 2022 at 8.1%, with sales and earnings above 2021 levels despite supply-chain turmoil dragging its net cash flow far below target.
On Monday, Volkswagen announced its first battery cell plant outside of Europe would be in Canada, with production to start from 2027. It was in no rush to decide on the location of its next European plant until it knew what incentives Europe would offer, board member Thomas Schmall said.
($1 = 0.9338 euros)
