Volkswagen announced that it intends to spend 180 billion euros over the course of five years in areas such as battery manufacturing and raw material procurement in an effort to lower the price of electric vehicles and safeguard its market share.
The company’s five-year investment plan. Arno Antlitz, the chief financial officer, told analysts that the company could delay some battery expenditures if the market did not expand as anticipated despite the markets being in disarray due to the failure of Silicon Valley Bank. The ultimate goal, according to Antlitz, is to always have stable finances.
Volkswagen, the largest automaker in Europe, is working to increase its share of the increasing market for battery-powered vehicles in an effort to catch up to Tesla, the inventor of the electric vehicle (EV).
The carmaker is still aiming to bring an affordable EV – costing around 25,000 euros ($26,795) at today’s prices – to market by 2025, produced on a second-generation version of its all-electric MEB platform.
Antlitz said he hoped the company would by then have struck enough raw material sourcing deals and expanded battery production to bring down EV costs, 40% of which stem from the cost of the battery.
With our current investments, we anticipate achieving 20% electromobility in new sales by 2025, according to Antlitz. On the other side, we must maintain the competitiveness of combustion vehicles, which is a double weight.
In an effort to enhance operations at its software subsidiary Cariad, the automaker said it is finalizing high-performance software for its prestige and luxury brands that could in the medium term be implemented throughout the company.
According to the carmaker’s recently published annual report, the business established under previous CEO Herbert Diess has exceeded budget and lagged behind on its objectives, incurring an operating loss of 2.1 billion euros in 2022 on sales of 800 million euros.
Shares in Volkswagen were 2.6% lower by 1122 GMT on Tuesday, with analysts at Jefferies describing the detailed final fourth-quarter results as “weak”.
Volkswagen met analysts’ expectations in 2022 on revenues but missed the consensus estimate for earnings before interest and taxes by 3%.
The funding choices are intended to carry out a 10-point plan created by Oliver Blume, the new CEO of Volkswagen, after he assumed office in September.
Thomas Schmall, a board member that the automaker’s requirements in Europe were met by the three factories already under construction and that it was not rushing to choose new locations. The first North American factory, scheduled to begin operations in Canada in 2027, was also revealed.
At a capital markets day on June 21, Volkswagen will present the findings of a training exercise called a “virtual equity story” that Blume had all of the company’s brands, from Audi to Bentley, prepare for. The most likely actual stock market candidate is battery unit PowerCo.
All brands had already set profitability and cash flow targets at a summit in January, Blume said, without sharing what these were.
The carmaker this month issued an optimistic outlook for the year ahead that sent shares soaring, forecasting a 10% to 15% rise in revenue on 14% higher deliveries.
