Volkswagen Is Doubling Down On Electric
Volkswagen, which had already committed to spending billions and billions on electric car development, said Friday that it planned to spend billions and billions more.
Volkswagen Group said it would spend 73 billion euros (around $86 billion) — or half the money it is spending on investments in Europe — over the next five years on electric powertrain technology, hybrid technology and other digital tech. That’s a rise from the 60 billion euros Volkswagen Group said it would spend last year or a 10 percent in its five-year plan budget.
Which is a statement of intent and a mark of how Volkswagen thinks things will go over the next decade. Volkswagen Group owns or has major stakes in Audi, Porsche, Scania, Skoda, SEAT, Bentley, Bugatti, and Lamborghini, in addition to its namesake brand.
Volkswagen Group said it will have 70 all-electric cars by 2030, and it also said it thinks it’ll have made 26 million all-electric cars by that time, too, including 19 million on its Mobile Electric Drive Toolkit platform, also known as MEB. That platform is quickly becoming the most important in Volkswagen’s history.
From Volkswagen’s release:
“Having set the course for a battery-electric future in the Volkswagen Group early on, we are now a global leader with our electric platforms and a broad range of electric vehicles,” said Herbert Diess, Chief Executive Officer of the Volkswagen Group. “In the coming years, it will be crucial to also reach a leading position in car software in order to meet people’s needs for individual, sustainable and fully connected mobility in the future. To that end, we have doubled our digitalization spend.”
Software, indeed, seems like it’ll be a big part of it. And I’m a little surprised that Volkswagen thinks it can compete on this front — carmakers are usually better off sticking to the thing they know how to do very well, which is making cars, and outsourcing the rest — but it definitely seems like Volkswagen thinks it can compete on this front. In Volkswagen’s case, better software is also integral to its self-driving development.
Here’s a bit more from Automotive News:
The goal is to build a proprietary software stack, which will be deployed in Audi’s Artemis project to develop an advanced, self-driving electric vehicle by 2024.
The company’s own share in software will increase to 60 percent from 10 percent, VW said.
In addition, a large share of the funds earmarked for digitalization will be invested in the mission-critical fields of artificial intelligence, autonomous driving and digitalization of significant business processes, the automaker said.
Jefferies analyst Philippe Houchois said while the overall investment budget had remained unchanged, VW’s priorities had seen a “meaningful re-allocation to software and digitization and a continued priority on Germany.”
To put this in a little more context: the Volkswagen Group said in late October that it made a 3.2 billion euro profit in the third quarter of this year, and expects to be profitable for the full year 2020, the year of pandemic. These are heavy bets on electric and self-driving tech, in other words, but Volkswagen is making them from an already-strong position.