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The Volkswagen Group is preparing for the mass production of electric vehicles, so strategic changes are required.

Volkswagen may be a bit late at the EV party, but they're looking for a fashionable start. The German carmaker will invest just under 44 billion euros in the next five yearscovers everything from e-mobility autonomous driving, new mobility services and digitization in their vehicles and plants. The total amounts to about one third of the total expenditure for Volkswagen in the planning period 2019-2023.

All of this is part of the Group's recent planning round, which was fully discussed and approved by the Supervisory Board of Volkswagen Aktiengesellschaft at its meeting on Friday. In turn, this move could lead to VW becoming one of the leading EV manufacturers. It takes into account the production capacity, liquidity and overall health of the company – even though the diesel gate scandal continues to deteriorate both in terms of perception and financially.

Volkswagen I.D.

The VW Group is working diligently to improve the returns of all its brands. Finally, the planned expenditures represent enormous financial challenges that Volkswagen plans to finance with its own resources. Programs aimed at securing the secured financial targets have already been initiated by the brands and companies belonging to the VW Group. According to various sources, Volkswagen is aiming to reduce both the investment ratio and the research and development ratio in the Automotive Division from 2020 to a competitive level of 6%. In addition, the company is targeting a net cash flow target of at least € 10 billion by 2020, albeit under the influence of the "gate of the year", which should limit cash outflow in the planning years of 2019 and 2020.

The joint ventures VW currently employs in China are not consolidated. They are therefore not included in the plans. According to VW, these joint ventures provide their own funding for investment in both plants and their respective products.

A brief overview of how Volkswagen wants to invest in electric vehicle investment

One of the biggest tasks and challenges faced by the VW Group is the assignment of new tasks to the production facilities. At the meeting, the Supervisory Board of Volkswagen Aktiengesellschaft therefore approved the new plans for the allocation of works. Specifically, Emden and Hannover are to be rebuilt to become only electric vehicles – here, the ID family of electric vehicles is built. Emden will see the production of small electric cars and limousines of several brands, while Hannover has specialized in the production of the card. BUZZ family – in addition to the production of vehicles with conventional drives.

Volkswagen

New Volkswagen I.D. Crozz

The changes in the strategic positioning of production facilities reflect the next five years of the challenges and finally set the necessary conditions for the construction of electric vehicles to be built on a large scale. However, after 2022, the year in which the ID family is to be introduced, more production capacity is needed and VW plans to build another plant in Eastern Europe.

By 2025, the production of the Volkswagen Group aims for a productivity increase of 30%. However, this does not mean more pollution. Thanks to the good progress made in recent years, the ecological footprint of the Group's plants is nearly halved over the same period. Combined with more electric vehicles from one of the largest car manufacturers in the world, this could lead to a massive increase for electric vehicles.

Source: Green Car Congress

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