German auto giant Volkswagen said
on November 16 it will invest 44 billion euros by 2023 in the smarter, greener
cars of the future as it ramps up efforts to shake off the "diesel
gate" emissions cheating scandal.
Over the coming five years,
Volkswagen said it aims to spend "almost 44 billion euros" ($50
billion) on electric, self-driving and connected cars as well as mobility
services like car sharing.
The figure represents roughly a
third of the group's planned expenditure between now and 2023, and the bulk of
it will go on developing e-cars, VW said following a supervisory board meeting
on future strategy.
Volkswagen's "electric
offensive" underscores just how serious the automaker is about closing the
gap with Asian competitors and US tech giant Tesla who have had a head start in
the e-car race.
"We want to make Volkswagen
the global number one in e-mobility," CEO Herbert Diess told reporters.
"The time has come to take
further technology and product decisions to achieve that goal." The group,
whose brands range from luxury Porsche and Audi to the budget-conscious Skoda
and Seat, has set itself the ambitious target of offering more than 50 electric
models by 2025, up from six today.
It has high hopes in particular
for the "affordable", zero-emission Volkswagen ID compact which will
have a battery range of 550 kilometers (340 miles) and cost roughly the same as
a Volkswagen Golf -- in a direct challenge to Tesla's mass-market Model 3.
As part of the new strategy,
Volkswagen intends to reshuffle some production sites in a bid to boost
efficiency and achieve savings by bundling production of different models
across brands.
"We are making our plants
fit for the future," Volkswagen board member Oliver Blume said.
Two existing German plants will
be converted into assembly lines for all-electric vehicles from 2022.
The plant in Emden will
specialise in building small electric cars and sedans for several of the
group's brands, while the Hanover factory will make the ID Buzz, the
clean-energy version of VW's iconic camper van.
In a nod to concerns about job
losses, Diess acknowledged that electric motors, which require fewer parts than
combustion engines, are "much less complex" to build.
But Volkswagen has promised to
guarantee jobs at both sites until 2028, focusing instead on phasing out
positions by not replacing those who retire.
VW also announced plans to open a
new factory at a yet to be determined location in eastern Europe.
Diess additionally confirmed that
Volkswagenwas "currently in talks" on teaming up with US competitor
Ford in building light commercial vehicles, which would involve sharing
factories.
But he stayed coy on speculation
that the cooperation could extend into electric and autonomous car manufacturing.
Diess said partnerships were
becoming necessary to achieve cost savings at a time when the industry is
undergoing an expensive transformation.
Looking further ahead, Volkswagen
said it was still "exploring the potential" of manufacturing its own
batteries for electric cars as concern grows in Europe about the Asian
dominance in battery cell production.
Volkswagen's pivot towards e-cars
has in part been spurred by efforts to shake off its ongoing "diesel
gate" scandal.
The group was forced to admit in
2015 that it had installed cheating software in 11 million diesel vehicles
designed to dupe pollution tests.
Suspicions of trickery later
spread to other car makers too, badly hurting the industry's reputation.
The saga also fueled a backlash against
diesel, with a string of German cities now facing driving bans for the oldest,
most polluting diesel cars.
Faced with increasingly angry
drivers, the German government has come under pressure to avoid the bans but
its efforts to get car makers to commit to cleaning up engines have had limited
success.
The "diesel gate"
fallout has so far cost Volkswagen more than 28 billion euros in fines,
buybacks and compensation and the company remains mired in legal woes around
the world.
Nevertheless customers have
remained loyal, helping Volkswagen to record sales last year.
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