Volkswagen will invest 180,000 million euros in its electric vehicle target

By Victoria Waldersee

BERLIN, March 14 (Reuters) – Volkswagen plans to invest 180 billion euros ($192.76 billion) over the next five years in areas including battery production and its North American operations, the company said. Tuesday the company, while spending on combustion engines will be reduced. from 2025.

With the goal of reaching 50% of electric vehicle sales worldwide by 2030, more than two-thirds of its five-year capital budget will go to electrification and digitalization, compared to 56% in the five-year plan published a year earlier.

Under its latest plan, €15 billion goes to battery factories and raw materials and €2 billion to a factory in the US state of North Carolina, for its Scout brand.

Investments in combustion engine technology will peak in 2025 and decline thereafter, according to the automaker, which has more ambitious electrification goals than some rivals.

Investment decisions are aimed at sticking to a 10-point plan drawn up by CEO Oliver Blume after he took over as helm of the automaker in September.

Throughout Tuesday, Volkswagen is expected to share the results of a mock IPO exercise initiated by Blume. In it, all of the company’s brands, ranging from Audi to Bentley, prepare to go public as a training exercise to become more attractive to capital markets.

The most likely candidate is battery subsidiary PowerCo. Reuters reported in November that there were talks with investors to buy the division ahead of a possible partial listing.

The automaker released an upbeat outlook for next year this month that sent shares soaring, with revenue expected to rise 10-15% on the back of a 14% rise in deliveries, despite chain issues supply.

Volkswagen’s profit margin in 2022 was at the upper end of its forecast of 8.1%, with sales and profits topping 2021 levels despite supply chain turmoil that lowered its flow net cash well below target.

On Monday, Volkswagen announced that its first battery factory outside of Europe would be in Canada, with production starting in 2027. It was in no rush to decide the location of its next European factory until ‘he learns what incentives Europe would offer, the council said MP Thomas Schmall.

(1 US dollar = 0.9338 euro)

(Reporting by Victoria Waldersee; edited in Spanish by Benjamín Mejías Valencia)